Markets open week with optimism, eyeing US inflation data

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This Monday (12) opens an important week for the financial market.

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Two US inflation data are due to be released on Tuesday and Wednesday: CPI, which measures consumer prices, and PPI, producer prices, respectively. According to market projections, both indices should show a slight drop of 0.1% in August, which renews the hope that US inflation has reached a peak.

With that in mind, the financial market can once again expect a easing from the Federal Reserve (Fed, the US central bank) on interest rates. The expectation, however, is that the monetary authority will raise the reference rate by 0.75 pp at a meeting next week – an aggressive move that should crown a succession of hikes of the same magnitude.

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At the same time, this week’s inflation data may recalibrate the market’s view, as forecasts for a decline — or even signs that it has peaked — may revive bets of a smaller rise, at the 0.5 spot. pp This is because the Fed has already declared that it is “date dependent” and that it will make decisions based on activity data, without ruling out fluctuations of greater or lesser degree in terms of interest rates.

Optimism infected the markets in the morning, which extended gains from Friday (9). In Europe, stocks were being pulled by banking stocks, while Asia had a reduced trading day due to national holidays in China, South Korea and Hong Kong. In Brazil, the 2023 public budget is again a concern.

Presented by Thais Herédia and Priscila Yazbek, CNN Money presents a balance of news issues that influence markets, finances and the direction of society and power dynamics in Brazil and worldwide.

*Posted by Tamara Nassif

Source: CNN Brasil

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