ThinkDaily - Global Markets React to US Inflation Report and FOMC Minutes...

The JSE ended the day with slight weakness, while European markets saw modest gains as investors digested the latest US inflation report. The report revealed that consumer inflation in March was lower than expected at 0.1% month on month, but core prices, which exclude volatile food and energy prices, remained elevated, rising 0.4% in line with expectations, though down from 0.5% in February.
 

Despite the seemingly encouraging numbers, annual core inflation was up 5.6% from a year ago, and overall consumer price index (CPI) was 5% higher year on year. This marked the first time in over two years that core inflation surpassed the overall measure. The upcoming producer price inflation report on Thursday, along with CPI, will be critical gauges for the Federal Reserve ahead of its next meeting on May 2-3 to decide on interest rates.

Despite the central bank's vow to keep hiking rates to combat high inflation, there are concerns that higher rates could push the US economy into a recession. This has led to safe-haven demand shifting from dollars to gold, with the precious metal remaining above the $2,000 mark, highlighting the high uncertainty in global markets.


Source: ThinkTrader Web
 

In terms of currency markets, the rand remained relatively unchanged at R18.3728/$, weakened 0.68% to R20.1895/€, and declined 0.41% to R22.9175/£. The euro, on the other hand, strengthened 0.7% against the US dollar to $1.0989.
 

Commodity-wise, gold rose 0.23% to $2,007.39/oz, platinum was up 2.22% to $1,015.60/oz, and Brent crude saw a 1.97% gain, trading at $87.15 a barrel.
 

The Dow Jones industrial average was up 0.3% at 33,785.84 points, and the S&P 500 was up 0.24%. European markets saw moderate gains, with London's FTSE 100, France's CAC 40, and Germany's DAX adding 0.5%, 0.09%, and 0.31% respectively.

Market Moves