Hello and welcome to our continued coverage of the global economy, financial markets, euro area and business.
Inflation fears are easing today as commodity prices retreat from their recent highs.
In China, iron ore futures fell for the second day in a row, down more than 9%, with steel prices also slipping amid signs of a crackdown from Chinese authorities.
Prices fell after officials in Tangshan City, a major steel producer, warned factories to keep the market in order.
They warned that any factory engaging in illegal acts – such as collusion, price manipulation, information fabrication, hoarding, or price hikes – would be “strictly investigated and dealt with. in accordance with laws and regulations ”.
If the circumstances are serious, he will be ordered to suspend his activities for rectification, or his business license will be revoked and made public.
This pushed steel prices down by around 6%, with traders also anticipating weaker demand for iron ore and coke.
The prices of other commodities are also cooling, with copper falling from its record highs.
Oil is also weaker, with crude prices falling the most in a month yesterday. Brent is back below $ 67 a barrel for the first time since the start of May.
So, after an eventful week dominated by inflation concerns, markets seem to end on a calmer note today.
Wall Street rebounded last night and European markets are expected to make gains this morning.
Yesterday Governor of the Bank of England Andrew Bailey tried to calm anxiety over rising prices, after inflation in the United States hit a 13-year high last month.
“So the really big question is this: [higher inflation] will persist or not? Our opinion is that based on what we see so far, we don’t think this is the case. ”
US central bank policymakers have also insisted they are in no rush to raise interest rates.
As Jim Reid from German bank summarizes:
Richmond Fed Chairman Barkin said he did not see persistent recurrent inflation as likely, while Federal Reserve Governor Waller later joined in saying the price hike was “temporary”.
This comes even as he expects inflation to stay above the 2% target until 2022, although he acknowledged that a persistent monthly increase of 4% would be “of great concern”. Waller wants to observe a few months of economic data before qualifying any points as outliers or adjusting policy directions.
The US economy will be under the microscope again later, with new data on retail sales, factory output and consumer sentiment.
- 12:30 p.m. BST: publication of the accounts of the ECB’s monetary policy meeting
- 1:30 p.m. BST: US retail sales for April – expected to increase 1%, from 9.8% in March
- 2:15 p.m. BST: US industrial production data for April – expected to rise 1%, from 1.4% in March
- 3 p.m. BST: University of Michigan Consumer Confidence Index for May – expected to rise to 90.4 from 88.3