London (AFP) – European stocks and the euro rose on Wednesday as euro zone inflation slowed but remained elevated due to high energy costs.
Markets were also buoyed by hopes that China will further ease its strict Covid containment measures following widespread protests, although gains were tempered by warnings from leaders about a crackdown on dissent.
Traders were awaiting a key speech from Federal Reserve chief Jerome Powell, and many expected him to outline plans for future interest rate hikes to combat high consumer prices in the states. -United.
Eurozone inflation fell to 10% in November, the first drop in 17 months but now in double digits, the EU statistics agency said.
Focus on rising rates
European Central Bank President Christine Lagarde expressed skepticism about the spike in inflation.
“The ECB continues to raise (interest) rates and that’s what traders are focusing on,” AvaTrade analyst Naeem Aslam told AFP, referring to the market reaction. following the data.
Inflation in the bloc had hit a record 10.6% in October, also boosted by soaring energy and food bills following Russia’s war in Ukraine.
“Eurozone inflation data surprised on the downside, providing an early indication that the record price pressures seen in recent months may have peaked,” added CEBR economist Karl Thompson.
However, he warned that “inflation is still likely to remain elevated throughout 2023” and forecast a rate hike next month.
Global central banks, including the Fed, have raised borrowing costs this year in a bid to dampen searing inflation that has also been fueled by the reopening of economies after the pandemic.
Meanwhile, Asian stocks mostly rebounded on Wednesday as investors looked past weekend protests in China after officials announced moves to ease the zero-Covid strategy.
But in a sign that the leaders were determined to maintain their authority, the country’s top security body called for a “crackdown” against “hostile forces”.
Data showing Chinese factory activity fell further in November underscored the impact of the zero Covid approach on the world’s second-largest economy.
Key figures around 11:45 GMT
London – FTSE 100: UP 0.7% to 7,563.21 points
Frankfurt – DAX: UP 0.4% to 14,411.52
Paris – CAC 40: +0.6% to 6,710.48
EURO STOXX 50: UP 0.6% to 3,958.81
Tokyo – Nikkei 225: 0.2% decline to 27,968.99 (close)
Hong Kong – Hang Seng Index: UP 2.2% to 18,597.23 (close)
Shanghai – Composite: UP 0.1% to 3,151.34 (close)
New York – Dow: FLAT at 33,852.53 (closing)
Euro/dollar: UP at $1.0366 vs. $1.0330 on Tuesday
Dollar/yen: UP to 138.76 yen from 138.63 yen
Pound/dollar: UP to $1.2013 from $1.1952
Euro/pound: DOWN to 86.28 pence vs. 86.42 pence
North Sea Brent Crude: UP 2.5% to $85.14 a barrel
West Texas Intermediate: UP 2.3% to $80.01 a barrel
© 2022 AFP