02 March, 2024

Banks Foresee Trends in Headline Consumer Price Index (CPI)

8 months ago

11 Dec, 2023

Crypto Macro, a prominent platform on Twitter for cryptocurrency news, has disseminated forecasts from various banks regarding the Consumer Price Index (CPI). This information sharing provides valuable insights into the future trajectory of inflation and the economy.

European stock markets climbed higher on Wednesday, buoyed by robust gains in the U.K. banking sector and anticipation over forthcoming U.S. inflation data. The rally was reinforced by a positive close on Wall Street on Tuesday and the Bank of England’s financial stability report, which confirmed that major U.K. lenders are equipped to weather potential interest rate increases.

Boosting the European equities market were the Bank of England’s stress test findings, which showed eight major lenders could cope with a stressful environment of rising interest rates without additional capital. Among the gainers, Thales (EPA: TCFP) saw its stock rise 1.5% as the French defense and technology company initiated talks to acquire Cobham Aerospace Communications for $1.1 billion, which could catalyze medium-term double-digit growth for Thales and enhance its margins.

Despite Spanish consumer prices in June trailing the European Central Bank’s 2% target at 1.9% year-on-year, German inflation figures were more unsettling. The data showed a 6.4% annual rise in June, disrupting a consistent decline since the start of the year. This suggests the European Central Bank’s interest-rate hikes might continue, given Germany’s status as the eurozone’s largest economy.

However, the primary focus on Wednesday was on the U.S. inflation figures. With the Federal Reserve expected to hike interest rates later this month, the U.S. Consumer Price Index could provide insight into the remaining capacity for rate hikes. Inflation in June is projected to have risen by 3.1%, a decrease from May’s 4%, while the core rate is expected to have fallen for the third consecutive month to 5% from 5.3%. Concerns linger that aggressive monetary tightening could push the world’s largest economy into recession, an outcome that has cast a shadow over global markets this year.



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