Stocks continue recovery despite inflation increase
|Today’s PPI has done little to dent market confidence, with stocks moving gradually higher as the recovery continues.
- FTSE in the green, as rebound goes on
- Rise in PPI and CPI fails to dent tentative confidence of market bottom
- Fresnillo heads up FTSE despite rise in inflation
The FTSE has enjoyed another relatively stable session, as the gradual recovery continues to take shape. While last week saw US volatility spike off the back of higher inflation expectations, we are seeing that volatility calm down considerably this week. With US stocks higher despite yesterday’s rise in US CPI and today’s PPI increase, there is clearly a reduced sensitivity in markets, with the yesterday’s initial stock sell-off subsequently turning into gains. That disregard for rising inflation could provide us with a clue that the recent episode is nearing an end, with the weakness seen in the latter park of today’s session unlikely to damage the bullish story being built over recent
days.
The FTSE 100 is being headed up by gold producer Fresnillo, which is catching a lift off the back of a spike in the precious metal this afternoon. Havens have been moving in tandem with stocks over the past fortnight, with the typical risk-on, risk-off relationships giving way to the impact of rising inflation and bond yields. While we have seen CPI and PPI inflation rise this week, the fact that we are seeing a more muted response from markets is a positive, with gold rising rather than falling as was seen in the wake of the average earnings data.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.