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Oil pressures markets ahead of central bank decisions

Rising oil prices kept inflation and interest-rate concerns at the forefront on Tuesday, weighing on US equities, while Asian markets were mixed on Wednesday as a rally in semiconductor shares supported South Korea's stock exchange. Brent crude neared USD 100 per barrel amid heightened Middle East tensions, with investors looking ahead to the European Central Bank’s decision on Thursday, US inflation data on Friday and the Federal Reserve’s policy meeting next week.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

Middle East financial markets
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Asian equities traded unevenly on Wednesday as continued gains in chipmakers supported South Korean and Japanese markets, while rising oil prices heightened concerns about inflation and interest rates. Korea’s Kospi rose 1.6%, supported by advances in SK Hynix and Samsung Electronics, while Japan’s Nikkei 225 was little changed; Hong Kong’s Hang Seng Index fell 0.3% and mainland China’s CSI 300 added 0.1%. Australia’s S&P/ASX 200 slipped 0.1% and India’s Nifty 50 fell 0.5%. Brent crude oil futures, up more than 60% this year, rose 1.1% to USD 99.01 per barrel, while West Texas Intermediate (WTI) futures gained 1% to USD 93.95, as the US Dollar Index edged down 0.1% to 98.74. Meanwhile, gold rose 0.7% to around USD 4380 per ounce and bitcoin gained 0.7% to around USD 79,200.

China producer-price inflation accelerates

China’s producer prices rose 3.8% year-on-year in August, accelerating from 3.5% in July and exceeding market expectations, according to data released on Wednesday. Consumer-price inflation increased to 0.8% from 0.5% in July, while core inflation edged up to 1%, as higher commodity costs, seasonal food prices and demand from high-tech industries lifted price pressures. The data highlight Beijing’s challenge of reviving weak household demand, as fading consumer subsidies, a soft housing market and persistently low confidence increase pressure for further policy support despite rising commodity-driven inflation.

US equities fall as oil prices rise

US stock indices declined on Tuesday as higher oil prices fuelled concerns about inflation and interest rates, with the Dow Jones Industrial Average falling 1.2% to 52,786.07 points and the S&P 500 dropping 0.6% to 7673.52. The Nasdaq-100 outperformed, edging down 0.1% to 29,507.70 points as gains in artificial intelligence-related chipmakers, including AMD, Arm and Broadcom, offset losses among technology heavyweights. Chevron, ExxonMobil and ConocoPhillips rose as Brent crude oil futures gained 1.1% to USD 99.01 per barrel.

German trade surplus widens sharply

German exports fell 0.8% month-on-month to EUR 138.2 billion in July, while imports declined 5.7% to EUR 116.9 billion, according to data released on Tuesday. The calendar- and seasonally adjusted trade surplus consequently widened to EUR 21.3 billion from EUR 15.4 billion in June and EUR 16.8 billion in July last year. Exports were 6.1% higher and imports 3.0% higher than a year earlier, with shipments to the US rising 19.1% from June, while exports to China fell 9.5%. The Euro Stoxx 50 and France’s CAC 40 each rose 0.1% on Tuesday, while Germany’s DAX was little changed and the Swiss Market Index fell 1.6%, dragged down by pharmaceutical giant Novartis.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Inditex.

Economic data in focus: French manufacturing production (08:45), European Central Bank President Christine Lagarde speaks (19:00).

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