US producer prices were 6.6% higher in May, the highest since 2010
Wall Street stocks edged lower overnight as the Federal Reserve began a two-day meeting, making investors cautious. Also, the data showed that US producer prices were 6.6% higher in May than a year earlier, the highest since 2010, adding to signs that inflation is running higher in the country. As such, the S&P 500 dipped 0.2%, the Dow Jones Industrial Average lost 0.27%, and the Nasdaq Composite fell 0.71%.
Today in Asia, equities were mixed-to-lower in quiet trading. On the data front, Japan’s trade surplus jumped 49.6% in May, pointing to a slow recovery in exports. In China, retail sales rose 12.4% in May, missing expectations once again. Industrial production rose 8.8% from a year ago, less than the 9% growth forecast. As such, China’s Shanghai Composite shed over 1%, Japan’s Nikkei 225 lost 0.51%, Hang Seng in Hong Kong gave up 0.70%, while Australia’s S&P/ASX 200 finished just marginally higher.
European stocks opened marginally higher on Wednesday before turning mixed in recent trading, with the main equity index holding off record highs amid a cautious tone among investors. The pan-European STOXX 600 was up 0.2% in early trade, with industrial and financial stocks rising 0.5% each.
Meanwhile, the dollar looks mixed, hesitating in tight trading ranges ahead of the outcome of the Federal Reserve meeting due later today. If the central bank expresses a more hawkish tone on the outlook for its monetary policy, the greenback could get a lift across the board, sending the euro back under the 1.2100 figure. Yesterday, EURUSD failed to challenge the 1.2150 intermediate resistance and has been directionless since then. A break below 1.2100 would pave the way towards 1.2060. However, the downside potential should be limited.