European stocks made modest gains on Friday as investors weighed
more signs of cooling U.S. inflation.
The drop in the U.S. PPI on Thursday was the latest sign of
easing inflation, following Wednesday's softer-than-expected
consumer price index report, which had traders weighing whether
inflation has peaked and if the Federal Reserve might cool its
"This week has been all about the inflation data and, frankly,
it could be the dominant force in the markets now right up until
the Jackson Hole symposium," wrote Craig Erlam, Senior Market
Analyst, UK & EMEA, OANDA.
"The fact that inflation not only decelerated in the U.S. but at
a faster pace than the consensus forecasts was a double win and
risk assets are feeling the benefit."
Stocks to Watch:
Shares in GSK, Sanofi and Haleon edged higher, recouping some of
the heavy losses of the past few days, after the companies
responded to recent comments related to Zantac litigation in the
Read more here.
Sweden's July CPI report shows the gap between underlying
inflation signals and the Riksbank's forecasts widening further,
"We judge that this forecast error and, first and foremost, the
current inflation outlook and risks, will make the Riksbank tighten
policy faster than it has so far headline communicated."
July headline CPIF inflation eased to 8% on the year from 8.5%
in June, but the step down is hardly a signal about easing
underlying inflation, instead, it was due to cooling in still
highly elevated energy prices, Handelsbanken said.
The bank now expects the Riksbank to raise its policy rate by 75
bps at its September meeting, from 50 bps previously.
Read: Swedish Core Inflation Rise Will Keep Riksbank in Hawkish
Read: Swedish Inflation Broke The Upside Surprise Trend in
Stock futures were higher headed into Friday's open, with a
preliminary reading on consumer sentiment for August likely to
further clarify how consumers are feeling about rising prices.
Stocks to Watch:
Electric-vehicle manufacturer Rivian's net loss in the second
quarter [nearly tripled to $1.7 billion, further pressuring it to
conserve cash and move quickly to fill customer orders. Its shares
shed 2.4% off hours.
Deutsche Telekom reiterated plans to build its stake in T-Mobile
and said it is nearing majority ownership of the U.S.'s
second-largest wireless carrier by customers. T-Mobile shares
nudged up 0.3% off hours.
The dollar was slightly higher in Europe against a basket of
currencies but may weaken again as "Fed pivot" bets grow, analysts
If the Fed meets market expectations to raise rates by only 50
basis points in September, this will likely mark the peak of its
aggressive rate-increase cycle, according to CMC Markets.
However, other central banks may keep pace on tightening,
especially the European Central Bank which appears to have just
begun its aggressive rate-increase cycle and which may cause
further dollar weakness.
Sterling is more likely to be driven by broad risk appetite than
Friday's better-than-expected U.K. economic growth data, said MUFG
"In reality the better June print doesn't change the overall
backdrop and won't alter at all the Bank of England's outlook and
hence its policy outlook," MUFG said.
The U.K. economy contracted 0.6% on month in June, less than the
1.3% decline expected by economists in a WSJ survey. For the second
quarter, the economy contracted by 0.1% on quarter against
expectations for a 0.2% drop.
Read: The Bank of England is Under Attack. Why Investors Should
Read: UK's Record Current Account Deficits Negative for
The 10-year Treasury yield has probably reached bottom, based on
technical charts, according to UOB Global Economics & Markets
On Thursday, the 10-year yield rose to breach resistance on a
declining trendline and the 55-day exponential moving average.
These developments and the yield's movements suggest the 10-year
yield's downside risk has dissipated and the 2.516% level is likely
a bottom which may hold for at least several weeks.
Going forward, the 10-year yield is expected to move between
2.516% and 3.103%, UOB said.
Oil prices ticked higher in early trade and remained on course
for a weekly rise as concerns about limited supplies persist.
Recession fears have undermined the demand outlook for oil and
weakened prices in recent days but investors remain concerned about
extreme tightness in the market, limited spare capacity, and a lack
of investment in new supplies, said Neuberger Berman.
"We know supply across the board is visibly tight due to
underinvestment and supply is going to remain very tight."
Base metals and gold were holding steady in London, with
sentiment wavering over mixed macro signals.
Figures from the U.K. showed the economy contracted 0.1% in the
three months to June, with a recession likely from October
In Asia, "sentiment onshore is still generally positive this
week, especially when domestic demand is expected to improve in the
second half of 2022," according to Marex.
DOW JONES NEWSPLUS
GSK, Sanofi, Haleon Shares Recover Some Recent Losses After
Zantac Drug Responses
Shares in GSK PLC, Sanofi and Haleon PLC all rose on
Friday--recouping some of their losses over the past few
days--after the companies issued statements responding to recent
comments related to the U.S. lawsuits over discontinued heartburn
Shares of GSK are currently trading 2.0% higher at 1,427.60
pence, Sanofi 0.4% higher at EUR85.18 and Haleon 0.3% higher at
UK Economy Contracted in 2Q As Inflation and Ukraine War Takes
The U.K. economy contracted in the second quarter, as inflation
and uncertainty from Russia's invasion of Ukraine took their toll
on the economy.
U.K. gross domestic product fell 0.1% from April to June
compared with the preceding quarter, the Office for National
Statistics said Friday, easing from the 0.8% expansion registered
in the first quarter. Economists polled by The Wall Street Journal
expected the economy to contract by 0.2%.
Flutter Swung to 1H Pretax Loss on Higher Costs; Revenue
Flutter Entertainment PLC said Friday that it swung to a
first-half pretax loss due to higher operating and sales costs,
though revenue rose and the second half has begun well.
The FTSE 100 gambling group posted a first-half pretax loss of
51.4 million pounds ($62.7 million), compared with a profit of
GBP77.0 million a year prior, after a GBP286 million charge for
amortization of acquired intangibles.
Deutsche Telekom Nearing Majority Ownership of T-Mobile
German telecommunications giant Deutsche Telekom AG reiterated
plans to build its stake in T-Mobile US Inc. and said it is nearing
majority ownership of the U.S.'s second-largest wireless carrier by
Deutsche Telekom has been looking to retake a majority stake in
T-Mobile since the unit's 2020 merger with Sprint, which SoftBank
Group Corp. previously controlled. The German company already has
majority voting power in the U.S. wireless carrier.
Shell Working to Fix Leak That Halted Gulf of Mexico Oil
Shell said Thursday it halted activity at several of its
offshore oil production platforms in the Gulf of Mexico due to
leaky pipelines, but said it expects to have the pipelines fixed by
"Shell can confirm that the Mars and Amberjack Pipelines have
been shut-in due to a flange leak at the Fourchon booster station,"
it said in an emailed statement, noting about two barrels of oil
leaked, and they have been contained. The Fourchon station is on
land along the Louisiana coast.
EU Proposes Significant Concession to Iran to Revive Nuclear
BERLIN-European Union diplomats trying to break a deadlock in
talks over an Iran nuclear accord have proposed a significant new
concession to Tehran aimed at speedily ending a U.N. investigation
into the Islamic Republic's past atomic activities.
A key sticking point in 16-month-old talks to revive the 2015
deal, which put limits on Iran's nuclear programs in exchange for
sanctions relief, has been a probe by the International Atomic
Energy Agency into undeclared nuclear material found in Iran in
Satellite Images of Crimea Air Base Indicate Explosions
Destroyed Russian Jets
Satellite images of the Russian air base in Crimea hit by
explosions appear to show several destroyed war planes,
contradicting Russia's official account that no planes were lost in
Ukrainian President Volodymyr Zelensky said in a video address
late Wednesday that Russia lost nine combat aircraft in Crimea.
Officials in Kyiv have mocked Russia but not taken responsibility
for the blasts.
U.S. Home Prices Jumped to Record High in Second Quarter
Home prices continued to climb across nearly all the U.S. in the
second quarter, when buyer demand started to fade due to higher
mortgage rates but still exceeded the housing market's unusually
The median sales price was higher in the quarter compared with a
year ago for 184 of the 185 metro areas tracked, the National
Association of Realtors said Thursday. The only metro area to post
a decline was Trenton, N.J., where median prices fell 0.7%, NAR
Trump Won't Oppose Release of Search Warrant
WASHINGTON-The Justice Department on Thursday asked a Florida
judge to unseal the warrant FBI agents used to search former
President Donald Trump's Mar-a-Lago home this week, along with a
list of items they took from the property.
The request raises the prospect that underlying reasons for the
extraordinary search of the former president's home could soon
Write to firstname.lastname@example.org
Write to us at email@example.com
We offer an enhanced version of this briefing that is optimized
for viewing on mobile devices and sent directly to your email
inbox. If you would like to sign up, please go to
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
August 12, 2022 05:41 ET (09:41 GMT)
Copyright (c) 2022 Dow Jones & Company, Inc.
From Sep 2022 to Oct 2022
From Oct 2021 to Oct 2022