Germany’s wholesale price index came in at+1.6% in October versus +0.8% m/m prior
Wall Street stocks managed to close marginally higher overnight, but are still headed for a weekly loss after a two-day sell-off triggered by a report on rising inflation that in turn fuels expectations that the Federal Reserve will have to raise interest rates more quickly than expected. The S&P gained just 0.1%, being on track for its first weekly loss in six weeks. The Dow Jones and Nasdaq gained 0.4% and 0.5%, respectively.
Asian markets were mostly higher on Friday as the bearish tone from a surpassingly US inflation has abated., sending the MSCI’s broadest index of Asia-Pacific shares outside Japan 0.25% higher. In Japan, the Nikkei 225 gained over 1% on the news that the government was planning to raise wages for nursery and care workers in the pending economic stimulus package. The authorities will prepare flexible measures on soaring energy costs in the coming package as oil prices cannot be predicted, Japan economy minister Yamagiwa said in a statement.
In Europe, equities opened on a more positive footing, with US stock index futures keeping higher as well. On the data front, Germany’s wholesale price index came in at+1.6% in October versus +0.8% m/m prior, reaffirming the trend of surging cost pressures throughout the economy. Now, investors await the University of Michigan’s consumer sentiment index while the key retail sales data is due next Tuesday.
Meanwhile, the dollar remains on the offensive across the market as the 10-year US Treasury bond yield extends the ascent triggered by stronger-than-expected inflation figures earlier this week. Against this backdrop, EURUSD dipped to fresh mid-2020 lows around 1.1435 before bouncing marginally in recent trading. It looks like the pair could derail the 1.1400 figure next week as the greenback remains elevated and could see more gains next week.