February 5, 2023

Hardwood Paroxysm

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Stock exchanges, Tokyo close higher. Asian yards are at a 6-month high

The Tokyo Stock Exchange ended trading higher for the fourth consecutive day, after rallying on Wall Street and awaiting US inflation data. The benchmark Nikkei average rose 1.03% to 26,446 points, adding 270 points. In the foreign exchange market, the yen did not change much against the dollar, at 132.30, and against the euro at a value of 142.20.

Asian stocks rose to a six-month high on Wednesday as the dollar held steady as investors await US inflation data for guidance on Federal Reserve interest rate policy. MSCI’s broader index of Asian-Pacific shares outside Japan rose 0.82% to hit a six-month high of 538.56. Australia’s S&P/ASX 200 Index rose 0.90%. Futures indicate that the positive mood is likely to continue in Europe, with Eurostoxx 50 futures up 0.54%, Germany’s DAX up 0.57% and the FTSE up 0.37%.

Inflation is in focus

The macroeconomic calendar is slim today, but investors are worried about the spread tomorrowAmerican inflation. It is estimated that US prices will decline from 7.1% in November to 6.6%. Its decline from the peak has already begun to reduce consumption, as evidenced by the ISM service sector index released last Friday, which fell below the 50-point threshold that defines deflation. ISM Servizi only missed 50 points once after the 2008-2009 financial crisis, during the raging Covid in 2020.

The market sees the end of the crisis

Furthermore, cost-of-living statistics are an important component of weighting in determining cost-of-living Federal Reserve to raise interest rates. In fact, the market assumes that the US central bank will not be able to raise interest rates above 5%. Yesterday, Federal Reserve Chairman Jerome Powell attended a seminar of the Swedish Riksbank and avoided making any comments about interest rates and the silence was interpreted as a reflection of the desire for an increasingly less aggressive monetary policy.

Yesterday’s old continent price lists stopped (il FTSEMIB (closed the session at -0.08%) and took advantage after the rebound that led them to that the highest in nearly a year.