Asian stocks fall as US and Iran exchange fire – business live
Rolling coverage of the latest economic and financial news Susannah Streeter, of the broker Wealth Club, says that the fresh round of conflict in the
Rolling coverage of the latest economic and financial news Susannah Streeter, of the broker Wealth Club, says that the fresh round of conflict in the Middle East has seen “optimism seep away” from the markets – but the key driver today is likely to be the latest US inflation data, which will be released this afternoon. The CPI numbers are set to show another painful rise in costs for consumers, who are already grappling with sharp increases in the costs of everyday goods.
The expectation is that the headline rate will rise to 4.2% year-on-year with a 0.5% jump in May. The big concern is that elevated wholesale energy costs are spreading and settling into the broader economy. The latest attacks in the Middle East indicate that the conflict is entrenched and increasingly hard to solve. On the former, Brent briefly fell below $90 for the first time since April 17th yesterday before partially rebounding after Trump vowed retaliation following Iran shooting down a US helicopter.
On the latter, the Philly Semiconductor Index fell by as much as -8.62% intra-day before recovering to -1.93% by the close. Reflation is expected to continue in the near term due to the lasting impact of the war in Iran on imported energy costs, and of course the fading drag from from negative carry-over effect from last year, which most people forget. While oil and gas futures markets are no longer pricing in a further escalation in the Middle East, uncertainty surrounding the peace talks and the effective reopening of the strait of Hormuz appears likely to linger in the near term.
Despite the acceleration in the annual rate, monthly momentum slowed noticeably, to just 0.5% m/m from 1.7% a month ago. 9am BST: Deadline data for the CMA and Ofcom to report back to government on the Telegraph/Mail deal 1.30pm BST: US inflation for May, forecast to rise to 4.2% 2.15pm BST: Treasury Committee hearing on student loans Continue reading...
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