World shares are trading near record highs on Wednesday with 12% gain for the half-year following a strong US consumer confidence data. The markets have been supported by trillions of monetary and fiscal stimuli in response to COVID-19. At the same time European markets have opened lower today with inflation and pandemic-related worries. The focus today is on France CPI, German employment and UK GDP and US ADP.
S&P futures rose 0.09%, while Dow Jones and S%P traded 0.03% and 0.02% higher overnight. Nasdaq added 0.19% hitting record high close. US Consumer Confidence jumped to its highest level in 1.5 years in June on the back of growing optimism on labour market and muted concerns of inflation. All eyes are on non-farm payrolls on Friday with 690k new jobs added expectedly. The dollar is having the best month since March with DXY steady at around 92. US Treasury yields are slightly down at 1.47%.
European shares fell on Wednesday on the worries of rising inflation and Delta variant spike in infections. STOXX 600 was down 0.2%, DAX is trading 1.28% lower, French CAC has lost 1.2% and FTSE 100 is 0.92% lower. Despite of losses today, European stocks are on the course to post its biggest percentage gain in the first six months of year since 1998. French consumer Price Index for June shown that headline inflation is only 1.9% YoY and Core CPI has slipped to 0.9%. An underlying print below 2% means that ECB officials are unlikely to start withdrawing monetary policy support. European volatility index is slightly higher at 17.40 due to quarter-end portfolio rebalancing. Germany 10-year government bond yield fell 0.5 basis point to -0.18 and euro is up 0.05% at $1.19.
MSCI index outside of Japan is up 0.08% and is on the course of a fifth straight quarterly rise. Chinese blue chips are 0.65% higher and Australian shares rose 0.16%. Nikkei is slightly down loosing 0.07%. Indonesia, Malaysia and Thailand are battling the rising infections. Lockdown measures have been extended in Australia amid COVID-19 outbreak. USD/CNY fell 0.1% to 6.4564 after China’s manufacturing purchasing managers index came in slightly higher than expected at 50.9.
US Crude stockpiles fell for the sixth week with WTI up 0.7% at $73.47 on the news. Oil investors await Thursday’s meeting of OPEC plus, who are expected to ease crude oil production curbs. Spot gold dropped 1% to $1,760.77