US CPI inflation beats expectations, sending markets lower
The US consumer price index came in at 0.4%m/m in September, above the Dow Jones consensus forecast of 0.3% and up from 0.1% in August.
On a 12-month basis, so-called headline inflation rose 8.2%, from its June high of around 9% but still near its highest point since the early 1980s.
The hotter-than-expected print erodes the market’s hope that the Fed will walk away from its aggressive interest rate hike path.
British Pound Jumps on Reports of UK Tax Cut Policy Changes
Pound sterling jumped against the US dollar on Thursday following multiple reports that the British government is in talks to scrap parts of its unfunded package of tax cuts.
The pound was up 1.45% against the dollar around 1:20 pm London time, trading at around $1.1265.
Belgium’s central bank chief ‘wouldn’t be surprised’ if ECB raises rates above 3%
Pierre Wunsch, governor of the National Bank of Belgium, says his bet is for rates to exceed 2%.
German inflation confirmed at 10% in September
The German consumer price index rose 10% year-on-year in September and 1.9% month-on-month, the country’s Federal Statistical Office said on Thursday, confirming a preliminary reading.
EU harmonized CPI inflation was 10.9% y/y and 2.2% m/m, also in line with forecasts.
Stocks on the move: Sweco down 7%, Taylor Wimpey down 5%
swedish engineering consultancy sweco fell more than 7% in early trading to the bottom of the Stoxx 600, while Taylor Wimpey fell more than 5% to spark a sell-off by UK homebuilders.
European markets: here are the opening calls
European markets are headed for a lower open on Thursday as investors around the world brace for the latest US inflation data.
UK FTSE index is expected to open 12 points lower at 6,812, German DAX down 41 points to 12,150, French CAC down 23 points to 5,803 and Italy’s FTSE MIB down 40 points. to 20,324, according to IG data.
The lower open in Europe comes amid mixed global sentiment ahead of the latest US inflation reading. US stock futures rose slightly overnight, while markets in the region Asia-Pacific were mixed as investors awaited the data.
Dow Jones Consensus Estimates show that the CPI rose 0.3% in September, up from 0.1% in August. That would bring the annual pace of inflation to 8.1% from 8.3%.
A rise in the consumer price index would also follow higher-than-expected producer price data, data showed on Wednesday. The US producer price index, a gauge of final demand wholesale prices, rose 0.4% in September, more than the consensus estimate of a 0.2% rise, according to Dow Jones.
Markets digested minutes released on Wednesday from the Federal Reserve’s September meeting that showed the central bank expected to keep raising interest rates until it sees inflation ease.
One comment led some to believe that the Fed might instead halt rate hikes, if not reverse them, if the financial market tumult continued.
Regarding the data in Europe, Germany publishes the final inflation data for September.
— Holly Ellyatt
CNBC Pro: Goldman Sachs favors Tesla and another big automaker even during an economic downturn
Goldman Sachs raised its forecast for electric car sales and said Tesla and another large automaker will benefit from the Inflation Reduction Act.
It comes at a time when the auto sector is facing multiple headwinds in 2023, from rising interest rates to a drop in consumer demand.
CNBC Pro subscribers can read more here.
— Ganesh Rao
Fed Minutes Show Central Bank Sees More Rate Hikes, Higher Rates Longer
Minutes from the Federal Reserve’s September meeting, released on Wednesday, show the central bank expects to continue raising interest rates and keep them higher until inflation shows signs of abating.
The minutes reflect policymakers’ discussions before the latest 0.75 percentage point increase, the third consecutive increase of that size delivered this year.
The central bank has been surprised by the persistent pace of inflation but remains optimistic that rate hikes will help control price increases.
—Carmen Reinicke, Jeff Cox
CNBC Pro: Is Meta a stock to buy or dodge? A bull and a bear face each other
These are tumultuous times for Goalwith investors fleeing this year as it battles headwinds.
Shares at the end of September plunged to their lowest level since January 2019, and have since fallen further.
Do big investors see Facebook’s parent company as a buy now that its shares are so cheap, or is it something to avoid?
CNBC’s “Street Signs Asia” spoke with Independent Solutions Wealth Management’s Paul Meeks and Longbow Asset Management’s Jake Dollarhide as they face off to present their bull and bear case for Meta.
Professional subscribers can read more here.
— Weizhen Tan
Stocks close lower after a choppy session
All three major averages closed lower on Wednesday after swinging between gains and losses throughout the day.
The S&P 500 lost 0.33%, falling to 3,577.03, its lowest close since November 2020 and its sixth straight daily loss.
The Dow Jones Industrial Average lost 28.34 points, or 0.10%, to close at 29,210.85. The Nasdaq Composite fell 0.09% to close at 10,417.10.