Awaiting June Inflation Data in The US

Global shares rose slightly, and the dollar weakened on Tuesday ahead of US inflation data. It could support a faster end to the US Federal Reserve’s interest rate hikes. In contrast, the prospect of China’s economic growth support boosted oil prices.

Traders are eyeing US inflation data for June to gauge whether price pressures continue to ease. This could signal the end of the US central bank’s interest rate hike campaign, Reuters reports.

The MSCI All-World index gained 0.3 percent, boosting European shares’ value. After extending support to the real estate sector, the pan-European Stoxx 600 rose 0.35 percent in early trade and Chinese stocks in Asia. Futures on the American stock index rose from 0.1 to 0.2 percent.

Investors on Monday heeded comments from several Fed officials who said the level of inflation warrants an additional interest rate hike. Still, the US central bank is nearing the end of its tightening cycle. Economists expect the consumer price index in June will grow 3.1 percent, after four percent in May.

The dollar index, which measures the US currency’s performance against six other currencies, fell 0.2 percent and is close to its lowest level in two months. Ten-year US bond yields fell by four basis points to 3.964 percent. US inflation data for June will be released on Wednesday.

Inflation in The US in May Was Four Percent

Inflation in the US slowed to four percent in May, the lowest level since March 2021, the Bureau of Labor Statistics announced on Tuesday. That supports the Fed’s eventual decision to end a months-long streak of aggressive interest rate hikes this week.

The consumer price index (CPI) and the core CPI, which excludes food and energy prices, slowed down by four percent annually. Core CPI rose for the third month in a row by 0.4 percent, in line with expectations, reports Bloomberg. Overall, CPI rose by 0.1 percent, thanks to lower gasoline prices.

The data comes a day before the Fed decides whether to raise interest rates for an 11th straight month or pause and continue to assess economic conditions. The Fed closely monitors core CPI growth, which continues to rise rapidly.