LGT Navigator

Eurozone inflation cools down

Wall Street's winning streak continued on Wednesday. Eurozone inflation cooled in June, although core inflation rose. Consumer price growth also slowed in the UK. 

Tina Haldner
Tempo di lettura
5 minuto
© shutterstock

The upward trend on Wall Street remains unbroken. The Dow Jones posted its eighth consecutive day of gains on Wednesday, its longest winning streak since September 2019, as the index rose 0.3% to 35’061.21 points. The S&P 500 was up 0.2% at 4565.72. The Nasdaq Composite closed flat on the day. At stock level, the focus was on Goldman Sachs' quarterly results. Although the US investment bank reported mixed results, the shares gained 1%. However, sentiment changed in after-hours trading as Netflix and Tesla reported their quarterly earnings. The streaming service missed market expectations with its revenue figures. Shares of Netflix lost 8%. Tesla shares tumbled 4%.

Asian markets were mixed again on Thursday. In Hong Kong, the Hang Seng Index is up 0.3% after two days of losses. The Shanghai Composite slips 0.3% and in Japan the Nikkei is down more than 1%.

Meanwhile, US construction activity cooled in June. Housing starts fell by 8% compared to the previous month. This compares with an increase of more than 15% in May. Building permits also declined, falling by 3.7% over the month. In May they had risen by 5.6%. Permits fell short of expectations, and an even sharper decline was forecast for housing starts.

Inflation in the eurozone fell sharply again in June. Consumer prices rose by 5.5% year-on-year, Eurostat announced on Wednesday, confirming a first estimate. This is the lowest reading since the beginning of the year. Annual inflation was 6.1% in May, down from 7% in April. In contrast to headline inflation, core inflation, which excludes volatile food and energy prices, picked up and rose from 5.3% to 5.5%, after an initial estimate of 5.4%. Price growth thus remains well above the European Central Bank's (ECB) target of 2%. Since last summer, the ECB has raised key rates by 4 percentage points. The next rate decision is due on July 27.

Inflation in the UK also slowed in June but remains high. Consumer prices were up 7.9% on the year, the Office for National Statistics (ONS) said in London on Wednesday. This compares with an annual inflation rate of 8.7% in May. Analysts had expected a drop to 8.2%. The slowdown in inflation was mainly due to lower petrol prices. Food prices rose again, but at a slower rate than in the previous month. Core inflation also declined. 

Corporate news in focus: ABB, Georg Fischer, Givaudan, SAP, Johnson & Johnson and Philip Morris with Q2 earnings.

Economic data in focus: Interest Rate Decision PBoC (3:15 CET), Producer Price Index Germany (8:00 CET), Philly Fed Index US (14:30 CET), Existing Home Sales US (16:00 CET).

LGT helps you make informed investment decisions

All about global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.