Fed minutes confirmed that the bond tapering was set to begin this year.
Headline US CPI data was slightly higher than expected with the core reading in line with expectations. Fed minutes confirmed that the bond tapering was set to begin this year.
US Treasuries recovered from an initial dip with yields moving lower as the bar for higher interest rates remained high.
Wall Street equities posted a limited net advance despite a high degree of uncertainty.
The dollar secured only a brief advance and lost ground as yields retreated.
Commodity currencies posted significant net gains as the US dollar lost ground and metals strengthened. Oil prices continued to find support on dips with expectations of tight supplies.
Precious metals posted significant gains as the dollar faded and bond yields moved lower. Bitcoin posted a 5-month high.
Euro-zone equities drew relief from the decline in bond yields during Wednesday and there was a positive response to earnings data. There was still an important underlying element of caution amid underlying inflation concerns. The German DAX index gained 0.7%, although the Spanish index moved lower.
Major UK stocks opened significantly lower, but there was a gradual recovery during the day with the mining sector underpinned by strength in precious metals and the FTSE 100 index secured a net advance of 0.15%.
There was further choppy trading in Wall Street stocks with some relief over a decline in bond yields, but there were still reservations over inflation and cost pressures. Overall, the S&P 500 index posted a 0.3% gain.
Futures held firm on Thursday with net gains in Asia despite reservations over Chinese developments.
Japan’s Nikkei 225 index gained 1.5% as the yen remained weak with a 0.5% advance for the Australian ASX index. China’s Shanghai index was little changed in late trading with the Hong Kong Hang Seng index closed for a holiday.
Stock to watch today
Halma shares are trading in a superb long term uptrend. The recent correction from all time highs has provided some value for investors who have been waiting for an opportunity to buy. The pullback in price has stalled in momentum and a fresh move to the upside appears to be starting. The strong close through the 10 Day Exponential Moving Average should trigger upside momentum in the short term. We expect to see the price go on to challenge the previous highs above 3180p.
CCM Opinion: BUY
Buy between 2780 – 2860p
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