By Geoffrey Smith and Ana Beatriz Bartolo
Investing.com – The U.S. releases consumer inflation data for May, amid expectations that the key annual rate will remain stagnant at 8.3%. Eurozone bond markets are in a mess as they try to come to terms with the European Central Bank’s plans to raise rates. Oil prices soar after US lawmakers introduced a bill that expands the scope of sanctions against Russia. Amazon dodges an expensive race for cricket broadcasting rights in India, and half of Shanghai is back under restrictive measures after authorities discovered a new outbreak of covid-19. Eletrobras (SA:) defined the value of its shares, while Paulo Guedes talks about the price freeze.
Here’s what you need to know about the financial markets on Friday, June 10th.
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1. US CPI set to stay at 8.3%
The US will release its for May at 9:30 am. While not the preferred price measure (the personal consumer spending basket better reflects the spending patterns of a broader segment), it will still make headlines on Capitol Hill and across the country.
Analysts expect prices to have risen 0.7% in , an acceleration from April as gasoline prices resume an uptrend that is still intact in mid-June. However, the annual rate is expected to be at 8.3% as last year’s price increase falls out of the calculations.
The CPI core, which eliminates the most volatile food and energy elements, must have moderated, in contrast.
2. Eurozone bonds in a mess as ECB details interest rate hike plans
The euro fell, as did bond prices in the euro zone’s periphery, on the prospect of the European Central Bank raising interest rates in a slowing economic environment.
At her press conference on Thursday, ECB President , declined to give concrete details on how the ECB intends to keep bond yield spreads within an acceptable range as it embarks on its first monetary tightening in 11 years. On the other hand, it provided extraordinarily detailed guidance on the path of interest rates, which could be 75 basis points higher by the end of September.
At 8:07 am, the euro was down 0.21% to $1.0591, having lost more than 1.5c on Thursday. The spread between yields and , a barometer of financial stress in the euro zone, widened another 3 basis points to 233 bps after soaring on Thursday.
Meanwhile, in China, the city of Shanghai has put more than half of its inhabitants under Covid-19 restrictions again, just weeks after ending a two-month lockdown that led to considerable social unrest and a sharp drop. out of economic activity. Authorities ordered PCR tests for all residents in 14 of Shanghai’s 16 districts over the weekend, Reuters reported.
The news came too late to derail a continued rally in Chinese stocks, which have responded enthusiastically to signs the government is winding down its campaign against tech giants this week. They were further encouraged by a drop in inflation and in May, raising hopes that the central bank will be a little bolder with its monetary easing next week.
3. American stock market
US equity markets are expected to open mixed as participants take a cautious wait-and-see stance before the CPI launch. The figure comes a week after a labor market report that still pointed to a good degree of dynamism in the economy.
At 8:10 am, the 100 futures were up 0.01%, while the Nasdaq 100 and the 100 were down 0.22% and 0.33%, respectively.
Stocks likely to be in focus later on include Walt disney (NYSE:) (SA:), which fired its head of television on Thursday and who also appears in another of the big corporate stories of the day. It is still embroiled in a $7.7 billion bidding war for the rights to broadcast the Indian Premier League cricket tournament, in contrast to Amazon (NASDAQ:) (SA:), which has decided to keep its money in its pocket. , according to Bloomberg sources.
DocuSign (NASDAQ:) (SA:) will also be on the radar, down 25% premarket after a poor balance on Thursday night.
SEE: US stock quotes
4. Eletrobras prices its shares
Eletrobras set its offer price at R$ 42 per shares this Thursday, 9th. The company sold 802.1 million shares, moving R$ 33.7 billion between base and supplementary lots. Thus, the government ceased to be the company’s controller, despite still maintaining the golden share.
Meanwhile, amid political speeches, President Jair Bolsonaro said the bill is “unfairly” attributed to him and called on the supermarket sector to reduce prices. Bolsonaro’s image is eroded because of inflation and he also said that this scenario favors the return of what he classified as “populism”, when referring indirectly to former President Lula.
Along with these statements made at the Forum of the National Supply Chain of the Brazilian Association of Supermarkets (Abras), the Minister of Economy, Paulo Guedes, defended that supermarkets should freeze prices until next year and that there should also be a cut in state taxes. on basic basket products.
At 8:11 am, the EWZ ETF was up 2% at $32.11 on the US premarket.
5. Oil on the rise as GOP lawmakers introduce Russian energy secondary sanctions law
Crude oil prices rose again on Friday after the threat of US “secondary sanctions” on the Russian energy industry rose a little.
U.S. Republican lawmakers have introduced a bill that would bar federal agencies from dealing with anyone who still has business ties to sanctioned Russian entities, in an echo of measures that have crippled the oil industries of Iran and Venezuela in recent years.
Figures from the UAE to India have warned the US against going down the same path with Russia, arguing that it would have a much more profound impact on global markets given Russia’s status as the world’s second largest exporter.
As of 8:13 am, U.S. crude oil futures were up 0.84% at $122.53 a barrel, while U.S. crude futures were up 1.01% at $124.31.
CHECK: Energy commodity quotes