The MSCI All Country World Index, which tracks equities around the globe, nudged up to a new peak this morning, having closed at a record high last night.
That suggests optimism that today’s inflation report will show that underlying US inflation moderated last month.
Last night, the US tech-focused Nasdaq index closed at a record high; it’s gained about 10% so far this year.
There was also another flurry of meme stock excitement yesterday, with GameStop soaring by 60%.
The UK’s stock market has helped with this rally – with the FTSE 100 hitting a series of record highs in recent weeks. The Footsie is up 9% since the start of January.
Hopes that the US economy will achieve a "soft landing" will be tested today by the latest US inflation data.
Investors across the globe are poised for April’s US CPI report, hoping to see signs that inflationary pressures are easing. But there’s also anxiety that price pressures are sticky, making it harder for the US Federal Reserve to lower interest rates soon.
On a monthly basis, prices are expected to have risen by 0.3%, a slowdown on March’s 0.4%.
Yesterday the Fed chair, Jerome Powell, said that inflation had been falling more slowly than expected, despite US interest rates being raised to their highest level in more than two decades.
Core inflation, a key measure of underlying price trends, is forecast to slow to 3.6% a year, down from 3.8%.
Yesterday, we learned that US producers raised prices by 0.5% in April, a faster increase than expected – but Wall Street shrugged that off, seemingly hopeful that today’s consumer price inflation report will show prices easing.
The dollar has dropped to a one-month low against the euro this morning, ahead of the CPI data.
In the City, profits at Burberry have dropped by 40% as the luxury goods market continues to struggle.
Burberry’s profits fell to £383m in the 12 months to the end of March, down from £634m a year earlier.
Revenues fell 4%, while profit margins also shrank.
The agenda • 10am BST: second estimate of eurozone GDP in Q1 2024 • 10am BST: European Commission to release its spring economic forecasts • 1.30pm BST: US inflation report for April • 1.30pm BST: US retail sales report for April • 3pm BST: UK Treasury committee questions the former Federal Reserve chair Ben Bernanke about the Bank of England’s forecasting
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