French Inflation Hits Record High
2022.06.30 14:47
French Inflation Hits Record High
Budrigannews.com – European stock markets slumped Thursday, ending a tough month on a gloomy note, weighed by concerns like aggressive monetary tightening to curb inflation will cause a severe global economic slowdown.
By 03:40 AM ET (0740 GMT), the DAX in Germany traded 2.2% lower, the CAC 40 in France fell 2.1%, and the UK’s FTSE 100 dropped 1.7%.
The major indices in Europe are on course to post significant losses this month, with the DAX leading the way lower and set to drop over 11%. Sentiment is very weak as the war in Ukraine shows no sign of ending anytime soon, the ECB is set to start raising interest rates to attempt to tackle soaring inflation and the economic recovery from the COVID pandemic struggles to take hold.
German retail sales increased slightly in May, rising by 0.6% compared with the previous month, even as high inflation continued to weigh on consumers, data showed on Thursday.
However, this small piece of good news has been overshadowed by French inflation climbing to a record high of 6.5% in June, raising fears that Friday’s official Eurozone CPI data will soar to a new record.
European Central Bank President Christine Lagarde warned in a speech at the central bank’s annual forum this week that inflation in the Eurozone is “undesirably high,” and the central bank will go “as far as necessary” to bring inflation back down to its 2% target.
Federal Reserve chair Jerome Powell, speaking at the ECB forum, warned that a broader economic slowdown could be a “likely” outcome from the aggressive monetary policy actions aimed at curbing the soaring prices.
In corporate news, Uniper (ETR:UN01) stock slumped almost 20% after the German energy group said it’s in talks with Berlin for a possible government bailout in response to the reduction of Russian gas supplies earlier this month.
Saab (ST:SAABb) stock rose 5% after the Swedish defense materials group won an order from the Swedish government for its GlobalEye Airborne Early Warning and Control aircraft.
Oil traded largely flat Thursday, on course for its first monthly loss this year ahead of the latest meeting of top crude-producing countries.
The Organization of Petroleum Exporting Countries and allies is widely expected to confirm another modest production increase for August later Thursday, with limited room for a significant boost to output, given the group has struggled to meet its previously agreed production targets this year.
U.S. crude inventories fell by about 2.8 million barrels in the week to June 24, data from the Energy Information Administration showed, but gasoline stockpiles climbed as near-record prices likely encouraged people to stay closer to home.
By 3:45 AM ET, U.S. crude futures traded 0.2% lower at $109.53 a barrel, on course for a monthly loss of over 4%, while the Brent contract fell 0.2% to $112.18, set to drop over 2% in July.
Additionally, gold futures fell 0.2% to $1,813.85/oz, while EUR/USD traded 0.1% higher at 1.0449.
