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At yesterday's stock market close, the Dow Jones Index (US30) increased by 0.15%, while the S&P 500 Index (US500) added 0.03%. The Nasdaq Technology Index (US100) closed positive by 0.12% on Thursday.

US inflation data came out better than expected. The overall annualized inflation rate rose from 3% to 3.2% (forecast 3.3%), while core inflation (excluding food and energy prices) fell from 4.8% to 4.7% (forecast 4.8%). Year-on-year inflation rose for the first time since July 2022, and oil prices, which have risen 27% in a month and a half, will do nothing to further reduce inflation. There is a lot of uncertainty on the economic front right now, but what is clear is that the Fed plans to keep rates high. Before the September meeting of the Fed, the market will see another publication of macro statistics on the labor market and inflation, so investors are in no hurry to make bets and open new positions. Therefore, the end of August is likely to pass on lower volatility.

Fed San Francisco President Mary Daly expressed a cautious tone, saying that while the latest inflation data is moving in the right direction, more progress is needed before it is clear that the central bank has done enough.

Wynn Resorts Limited (WYNN) reported quarterly results that beat Wall Street estimates for both top-line and net income, helped by the continued strength of its Macau business. Alibaba Group Holdings (BABA) shares rose more than 4% after reporting quarterly earnings that notably beat analysts' estimates.

Equity markets in Europe were mostly up yesterday. Germany's DAX (DE40) rose by 0.91%, France's CAC 40 (FR40) gained 1.52% on Thursday, Spain's IBEX 35 (ES35) jumped by 1.52%, and the UK's FTSE 100 (UK100) closed up by 0.41%.

UK GDP data will be released today. The economy is expected to grow by 0.2% for the quarter, while on an annualized basis, the economy is expected to remain at 0.5%. This data could have an impact on the outlook for the Pound and the UK100 Index. UK inflation data is expected next week, which should give a clearer picture of the Bank of England's (BoE) stance on monetary policy. The latest market estimates put the probability of a 25 basis point rate hike on September 21 at nearly 70%, with the final rate expected to be 5.75% next March.

The US Treasury yields initially fell on the release of CPI below the fixed line and then recovered as a deeper analysis of the inflation report noted rising services inflation. Gold has an inverse correlation to government bond yields, so it was sold off at the end of the trading session yesterday.

Oil prices declined on Thursday, with Brent crude holding close to January highs. Speculation of another US interest rate hike subsided after inflation data and OPEC maintained positive oil demand forecasts.

Asian markets traded flat yesterday. Japan's Nikkei 225 (JP225) gained 0.84%, China's FTSE China A50 (CHA50) fell by 0.13%, Hong Kong's Hang Seng (HK50) gained 0.01% on the day, and Australia's S&P/ASX 200 (AU200) was positive by 0.26% on Thursday.

Fears of a collapse in China's real estate market are renewed amid reports that the country's largest real estate developers are having trouble meeting their debt obligations. Shares in China's major real estate companies faced a fresh wave of selling on Friday after Country Garden Holdings, one of the country's largest real estate companies, warned of huge losses in the first half of 2023.

• S&P 500 (F)(US500) 4,468.83 +1.12 (+0.03%)
• Dow Jones (US30) 35,176.15 +52.79  (+0.15%)
• DAX (DE40)  15,996.52 +143.94 (+0.91%)
• FTSE 100 (UK100) 7,618.60 +31.30 (+0.41%)
• USD Index  102.64 +0.15 (+0.15%)
   

Important events for today:

• UK GDP (m/m) at 09:00 (GMT+3);
• UK Industrial Production (m/m) at 09:00 (GMT+3);
• UK Manufacturing Production (m/m) at 09:00 (GMT+3);
• US Producer Price Index (m/m) at 15:30 (GMT+3);
• US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

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