Looking at the closing levels for the European indices, the UK FTSE 100 is the only bright light with a gain of 0.27%. The worst performer is the German Dax. A look at the closing levels shows:
- German DAX, -0.83%
- France CAC -0.51%
- UK's FTSE 100 +0.27%
- Spain's Ibex, -0.18%
- Italy's FTSE MIB -0.46%.
As London traders exit for the day, US stocks remain under pressure:
- Dow industrial average -600 points or -1.18% at 50279
- S&P index -67 points or -0.90% at 7319.50
- NASDAQ index -313 points or -1.23% at 25362.50
Ahead of the 10 year note auction at 1 PM, the US yields are trading little changed:
- 2-year yield -0.2 basis points at 4.1224%
- 5 year yield -0.1 basis points at 4.251%.
- 10 year yield unchanged at 4.528%
- 30 year yield -0.1 basis points at 5.009%.
The price of crude oil is moving higher. The price is up $2.80 or 3.07% at $90.99. The high for the day has reach $91.47. The low was at $87.39. Crude oil inventories fell -7.227 million barrels as a drain continues.
- Gold prices are down $-134 or -3.13% at $4126.16.
- Silver is down $0.43 or -0.69% at $64.86
- Bitcoin is trading at $62,148. Since bottoming on June 4 at $59,100, the price rotated to $64,197 and trades between those levels.
The Bank of Canada left its policy rate unchanged at 2.25%, where it has remained since October, while acknowledging that the Middle East conflict is slowing global growth and pushing inflation higher through rising energy prices. The Bank noted that Canada's economy remains soft, with Q1 GDP weaker than expected and excess supply still present, although growth is expected to resume in the second quarter. While officials continue to look through the near-term impact of higher energy prices, the statement adopted a slightly more hawkish tone by emphasizing that the Bank "will not let higher energy prices become persistent inflation." Governor Macklem stressed that future policy could move in either direction, with potential rate cuts if U.S. trade restrictions significantly hurt growth, or rate hikes if elevated energy costs begin feeding into broader and more persistent inflation pressures.
US CPI was a mixed report, with the headline reading ugly but the core details less alarming. Headline CPI rose 0.5% m/m, lifting the unrounded annual rate to 4.25%, the hottest since April 2023, driven largely by another surge in energy and gasoline prices. Energy rose 3.9% m/m and gasoline jumped 7.0%, accounting for more than 60% of the monthly increase. However, core CPI rose just 0.2% m/m, below expectations, while shelter slowed to 0.3%, OER eased to 0.3%, and motor vehicle insurance fell 1.7%. The report leaves the Fed with a dilemma: the headline inflation trend is moving sharply higher because of the oil shock, but the underlying details argue against panic. For now, markets showed little immediate change, with rate-hike pricing largely steady for September and December.
