Inflation in the United States slows down and rises less than expected. In July 2022 it remained unchanged compared to the previous month, while on an annual basis there was a growth of 8.5%, less than the 8.7% expected by analysts and 9.1% in June. The markets welcomed the news with relief: the European stock exchanges all closed higher and the euro returned to its highs for over a month against the dollar.
The price of gasoline drops
Since July, gasoline prices at the pump in the United States have plummeted and continue to fall. On a percentage basis, prices fell 7.7%, the highest since April 2020, after rising 11.2% a month earlier. The national average, according to consumer advocacy site AAA Gas Prices, of $ 4,010 a gallon a month ago stood at $ 4,684, nearly 70 cents higher. This is still a higher price than a year ago, when they paid $ 3,186 at the pump.
What happens to other raw materials
Prices of other commodities, including copper, wheat and maize, have also fallen in recent weeks, after having risen sharply following Russia’s invasion of Ukraine. The decline in the price of oil widens after the data on US inventories which record an increase much higher than expected. The price of WTI, which in the morning dropped by more than 1% and on the American inflation data had fallen back to -0.18%, now loses almost two percentage points to -1.94% at 88.74 dollars a barrel . Similar is the trend of Brent which drops 1.86% and is trading at 94.52 dollars a barrel. The prices of other basic necessities, such as homes and services such as healthcare, however, are still rising and may not fall as quickly as oil or corn. Falling inflation is good news for the Biden administration, which passed the $ 739 billion Inflation Reduction Act in the Senate this week. A bill, of democratic origin, which provides for a series of interventions to contain the price rope and significant investments in more sustainable energy policies and health care. There are some signs of moderating inflation, President Joe Biden said, commenting on the new data. We expect headwinds but the situation is improving, he added.
Stock markets rise, spread falls
Markets reacted positively to falling US inflation. Wall Street opens strongly: the Dow Jones rises by 1.37% to 33,225.71 points, the Nasdaq advances by 2.36% to 12,784.67 points while the S&P 500 scores a progress of 1.70 % at 4,192.55 points. European stock exchanges all closed positively. After a cautious start in Piazza Affari, in line with the other European lists, the Ftse Mib index at the end of the session closed up 0.95% to 22,702 points, while the Ftse Italia All Share gained 1.06 % to 24.876 points. The best European marketplace is Frankfurt which ends trading with a progress of 1.25% at 13,703.57 points. Both the Ftse Mib London and the Cac40 in Paris closed with an increase of 0.52%, the first index at 7,527.27 points, the second at 6,523.44. Closing down for the BTP-Bund spread. At the end of the session, the yield differential between the ten-year bond issued by the Italian State and the German correspondent stood at 210 points from 213 basis points on the eve of the session. On the foreign exchange market, the euro accelerates against the dollar and closes trading at 1.0357 on the greenback, gaining almost 1.5%.