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The Trader: Stocks flat before FOMC minutes

Shares in London appear to be in limbo after inflation undershot expectations, for now
The Trader: Stocks flat before FOMC minutes

 

  • UK inflation dips unexpectedly 
  • US stocks end winning run
  • Eyes on the Fed as economic indicators in US weaken

European stocks opened higher on Wednesday after a more positive handover from Asia. Wall Street snapped a 5-day win streak to end the day lower by around 0.7 per cent, with the Nasdaq off 0.9 per cent. The FTSE 100 is higher again today after a solid shift on Tuesday left it outperforming peers – helped by BHP’s rally. Gold is facing resistance at the 50-day line around the $1,800 level as the bounce continues, WTI trades up around $67 ahead of the weekly EIA inventory figures after the API reported a draw of a little more than 1m barrels. 

UK inflation fell to 2 per cent last month, down from 2.5 per cent in June, leaving the Bank of England some breathing space, though it’s rather messy - this could just be a minor speed bump on the path to 4 per cent as base effects/summer discounting in clothing weighs. Rising wage growth and a labour market shortage may conspire to drive up more persistent inflation trends. Core month-on-month inflation was flat vs +0.3 per cent expected. Sterling was barely moved and trades a little above yesterday’s 3-week low around 1.3745, but still below the 200-day SMA. 

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