Investors listened closely as BoE governor Andrew Bailey delivered a speech at the Cost of Living Crisis Conference in London yesterday. Bailey touched on a number of inflation-related issues including monitoring the Bank’s current tightening, interest rates and the condition of the UK’s labour market.
Hawkish comments from Bailey did not seem to boost an already pressured sterling however, pound-watchers will be keeping a close eye over the coming days for the currency’s response.
It was a good day for equities in London yesterday. The benchmark FTSE 100 stocks finished above the 7,900 mark with gains largely driven by advances in the materials and energy sectors. Investors also welcomed data from China which pointed to signs of economic recovery and contributed to bullish bets on the FTSE 100.
Key eurozone economies continue to churn out the inflation data this week. On Wednesday, markets saw Germany’s preliminary monthly and yearly figures which both rose above expectations (8.7% and 0.8%).
France and Spain’s inflation rates also rose earlier this week.
In the US, the Institute for Supply Management released their latest purchasing manager’s index on Wednesday. The index edged higher to 47.7 in February, following a fall to 47.4 in January, however it fell short of expectations of 48.
Spot on PMI results, or those above forecasts usually please currency markets, so dollar-watchers will be keeping a close eye on how the weaker-than-expected data impacts the dollar’s movements over the coming days.
Stocks in the US hit a 5-week low on Wednesday with the US500 decreasing to 3943. On the other hand, Stocks of crude oil in the US rose by 1.166m barrels to 851.8m in the week ended February 24th. This pointed to the highest level since September.
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