Global stocks recover as risk appetite improves

Markets prepare for US inflation data tomorrow

By Raed Alkhedr | @raedalkhedr | 11 April 2023

  • The US dollar is showing some stability

  • Global stocks are seeing some recovery

  • Demand concerns weigh on oil markets

Global stocks soar as investors embrace risk appetite

Global stocks rebounded as investor confidence grew stronger. Many investors believed that central banks would eventually abandon their stringent monetary policies, even if short-term interest rates rose following the latest US jobs data release. The Eurostoxx index rose by 0.5%, while the Japanese Nikkei index rose by more than 1%. US stock index futures contracts remained relatively stable as investors awaited tomorrow's inflation data release.

These gains followed reports of China's consumer inflation reaching its lowest level in 18 months, and the acceleration of factory price declines in March due to weak demand. Moreover, Wall Street is gearing up for another earnings season, with major US banks expected to release their earnings reports for the first time since the banking crisis in March.

US Dollar prepares for consumer price data release tomorrow

Global markets are eagerly anticipating the release of US inflation data tomorrow, Wednesday. It is expected that inflation will continue to slow down and rise annually by 5.2%. It's worth noting that this inflation data will be the deciding factor in the Federal Reserve's future monetary policy.

After the release of positive US employment data, expectations of a US interest rate hike in May have risen again, currently reaching 79%. This expectation of a tighter monetary policy suggests that the US economy is still holding up well despite the recent interest rate hikes.

In anticipation of the consumer price data release, the US dollar has seen some decline due to profit-taking, with the dollar index returning to near 102.00 levels.

Oil prices stabilize amid concerns of weak demand

Oil prices stabilized on Tuesday as Chinese inflation data suggested weak demand in the world's second-largest economy. Brent crude futures fell by 0.2% to $84 per barrel, while US crude futures fell by 0.1% to $79.62 per barrel.

Data from China revealed that consumer inflation rose in March at the slowest pace since September 2021, indicating continued weak demand amid an uneven economic recovery. This has led to expectations that Beijing may take steps to boost growth.

Overall, concerns about weak demand continue to weigh on oil prices. However, market analysts are closely monitoring any developments that could affect supply and demand dynamics in the oil market.