Benign UK inflation soothes markets
UK headline inflation held steady at 4% year-on-year in January on the back of easing prices for furniture and household goods, food and non-alcoholic beverages.
Core inflation, that is without the more volatile food and fuel elements was also lower than expected. This had the effect of boosting equities and pulling back the recent strength in sterling. Inflation still remains double the Bank of England’s target rate of 2%, but the rate has halved in the last year.
(AI Video Summary)
UK inflation
The UK's inflation rate came in weaker than expected, which caused a small rise in the European equity markets. Then, it discusses Lyft's earnings, which initially caused their stock to skyrocket by 66 percent, but later saw a significant loss and ended the session up only 12 percent overall.
London and European markets
The video goes on to show volatility charts, which reveal a spike in volatility due to US inflation numbers, but now there is a slight decrease. It mentions that the London and European markets are doing well, especially in Germany and France. Similarly, the Asia-Pacific markets, like the Nikkei, are also performing well, reaching their highest close in 34 years. On the other hand, Wall Street had a positive day after a previous decline, but the tech sector experienced losses for the second day in a row.
EUR/USD
The overall trend in the markets is still rising, with a supportive upward line. Additionally, it mentions that the Federal Reserve is expected to lower interest rates in June. Furthermore, it highlights the decline of the British pound due to weaker-than-expected UK inflation data and the Eurozone's struggles, with the EUR/USD trading below a support line.The video also covers some corporate news.
Dunelm
It mentions positive numbers from Dunelm, a company, but notes that the consumer outlook remains uncertain. Heineken reported higher-than-expected operating profit, but slightly lower-than-expected organic revenue. It also mentions that Delivery Hero is facing challenges with thin margins, while Airbnb reported better-than-expected revenue but had a loss due to tax and withholding expenses. Cisco Systems is set to release their earnings today, with expectations of 84 cents per share. On the other hand, Kraft Heinz is releasing fourth-quarter numbers with an expected 9 percent year-over-year earnings drop.
The decline in gold prices due to the rise of the US dollar, as well as the tension in the oil markets caused by geopolitical factors and uncertainty over potential interest rate cuts.
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