Eurozone inflation still to come
Further steps in the right direction in regards to Italy avoiding another snap election – even if it does result in the Five Star Movement and League parties forming a eurosceptic government – allowed the European markets to hold steady on Thursday.
Rising 0.4% the euro managed to put a bit more distance between it and the 10 month lows it struck against the dollar on Tuesday night, the single currency climbing back towards $1.17 after the bell. Against the pound it was a bit more sluggish; however, flat at just under €1.14, it is trading at the top end of its recent bracket.
The eurozone indices, meanwhile, were broadly positive as well. Though the DAX dipped into the red, the CAC and FTSE MIB both continued to rise, the latter especially expressing its relief that things – for now, at least – appear to be calming down.
It’ll be interesting to see what role the eurozone’s May inflation reading plays in the day’s trading. The surge in oil prices means analysts are expecting a sharp month-on-month jump, from 1.2% to 1.6%; that could give the euro a bit more room to breathe, but only if investors are willing to overlook the fact that the increase isn’t really due to anything going on in the eurozone.
As for the FTSE, with little else to work with the UK index remained in thrall to the ongoing political situations in the eurozone and US – the latter producing another North Korean twist as secretary of state Mike Pompeo met top Kim Jong-un aide Kim Yong-chol – on Thursday. Luckily this meant the FTSE could re-cross 7700 with a 0.3% increase, leaving it 200 points off of last week’s all-time highs.
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