Signs of Abating Inflation Benefit World Markets

0
54

World stock markets rose on Tuesday, as investors cheered signs that inflationary pressures are easing in many regions. The Organisation for Economic Co-operation and Development (OECD) reported that inflation in leading economies fell to 8.8% in February from 9.2% in January. Meat price increases that had been driving inflation have begun to subside, leading many to anticipate that central banks will not raise interest rates.

In Europe, the DAX in Germany rose 0.6%, while the CAC 40 in Paris was 0.5% higher. In Britain, the FTSE 100 edged 0.1% higher. The S&P 500’s future and Dow Jones Industrial Average stayed the same. Sydney’s S&P/ASX 200 also saw a 0.2% increase after Australia’s central bank kept their key interest rate at 3.60%.

South Korea reported their consumer inflation rate fell to 4.2% in March, below expectations. This news has raised hopes that the central bank will keep their key interest rate at 3.5% when they meet next week. Vietnam’s central bank also cut their benchmark rate on Monday.

In Southeast Asia, Tokyo’s Nikkei 225 gained 0.4%, while Shanghai Composite index picked up 0.5%. Hong Kong’s Hang Seng lost 0.7%.

Oil prices also surged on Monday, with Exxon Mobil jumping 5.9%, Marathon Oil 9.9% and BP 4.3%. This was after Saudi Arabia and other oil producers announced their plans to cut production by 1.15 million barrels per day from May until the end of the year.

Reserve Bank of New Zealand will also make a decision on interest rates on Wednesday.

Exxon Mobil Corporation is an energy company that specializes in petroleum, natural gas and petrochemical products. It is the largest publicly traded international oil and gas company in the world and one of the most valuable companies in the world, as of 2021.

Ipek Ozkardeskaya is the Chief Market Analyst at Swissquote.com, a Swiss-based online financial trading provider. She specializes in multi-asset and qualitative trading strategies, and works to develop trading education for globally for individuals. She also publishes commentary about market events and trading strategies.