Chinese PPI rises to highest In 12-years
Data released from China today showed that manufacturing prices rose to their highest level in over 12-years.
This news comes a day after the World Bank confirmed that it expected the global economy, led by China and the United States, to have its biggest recovery since the 1940s.
Figures released by China’s National Bureau of Statistics revealed that the country’s producer price index rose by 9%, as prices recovered from 2020’s pandemic lows.
After rising by 6.8% in April, markets had expected the latest report to show a rise of 8.5% in May.
Today’s number beat expectations as the rise of commodity prices contributed to the overall price inflation. Markets now wait to see core inflation figures from the United States on Thursday.
FTSE 100 falls on Bank of England inflation warning
Britain’s FTSE 100 closed in the red on Wednesday. As a Bank of England official gave markets a stark inflation warning.
As the United Kingdom edges closer to a post-pandemic reality. Bank of England Chief Economist Andy Haldane stated that the bank must tread carefully in making policy changes.
Haldane stated that, “In my view this is the most dangerous moment for monetary policy since inflation-targeting was first introduced into the UK in 1992 after the European Exchange Rate Mechanism debacle“.
He went on to explain that. “If wages and prices begin a game of leapfrog. We will get the sort of wage-price spiral familiar from the 1970s and 1980s. And that may mean that at some stage we need to start turning off the tap. When it comes to the monetary policy support we have been providing over the period of the COVID crisis”.
The FTSE 100 closed 0.20% lower on Wednesday.
WTI crude rallies to 2-year high
The rise of crude oil prices continued in today’s trading session. With recent demand for energies taking prices to their highest in over 2-years.
WTI crude hit an intraday high of $70.61 earlier today. Which is the most the energy has been priced at since October 2018.
Today’s rally comes a day after the Energy Information Administration announced that fuel consumption for the year was due to be higher than expected.
The EIA stated that growth this year in the United States, which is the world’s biggest oil consumer, would be roughly 1.49 million barrels per day. Which is an increase from an earlier forecast of 1.39 million.
Since reaching the high, prices have fallen, and now hover just below $70 per barrel.
Quote of the day – “In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.”Peter Lynch
Senior Market Analyst