UK reported 40-year high inflation, EU markets struggle

EU markets open lower as UK reports a 40-year high inflation

UK reported on Wednesday morning that its inflation, which as of April 2022 stands at 9%, is at the highest levels since 1989. This saw a bearish trend in markets as European stocks opened lower on Wednesday morning.

London’s FTSE 100 futures were perhaps the biggest victim following this morning’s news, falling by 0.084%. Meanwhile Germany’s DAX futures were down by 0.08% and France’s CAC 40 futures declined by 0.04% in the early hours of the morning.

In US, stock markets closed on bullish terms. NASDAQ 100 saw a 2.62% gain, the S&P 500 was up a little over 2%, closing at $4,088 and the Dow Jones Industrial Average (DJI) gained 1.34%.

Gold also follows bearish trend 

Gold futures also followed the bearish trend on Wednesday morning falling by 0.52% to $1,808.2 per ounce.

Silver was also down losing over 0.80% of its value. Palladium futures followed losing 0.85% meanwhile platinum futures were up by 0.13%.

Oil prices higher as anticipation for demand recovery grows

Oil prices climbed on Wednesday morning as anticipation surged around China lifting its lockdowns after Shanghai reported a fourth consecutive day with no new COVID-19 cases.

Lockdowns in China had a straining effect on oil prices as well as demand concerns which were also affected by the EU imposing bans on Russian oil supplies.

Brent Crude futures were up 0.73% Wednesday morning valued at $112.66 a barrel. West Texas Intermediate (WTI) futures were also performing higher by 1.11% costing $110.85 a barrel.

UK inflation at 40-year high

Inflation in the UK is at a 40-year high standing at 9% in the 12 months to April 2022 as food and energy prices soared in the past several months, the country’s consumer price index (CPI) reports indicated on Wednesday.

Past data from the CPI showed an increase in inflation in March 2022 when the rate was 7% and February 2022 at 6.2%.

Consumer prices surged by 2.5% in April 2022 alone, compared to the 0.6% rise in April 2021.

Owner occupiers’ housing costs (CPIH) surged by 7.8% in the past year, up from 6.4% in March.

Powell says Fed will continue raising rates until inflation declines

During a livestream interview with the Wall Street Journal on Tuesday, the Federal Reserve chair, Jerome Powell, said that the Fed will not stop raising its interest rates until the inflation in the US falls back down to normal levels.

“If that involves moving past broadly understood levels of neutral we won’t hesitate to do that … We will go until we feel we’re at a place where we can say financial conditions are in an appropriate place, we see inflation coming down,” Powell said.

At the start of May 2022, the Federal Reserve raised its interest rates by 50 basis points, the highest one-month rate hike seen since 2000 in an attempt to slow down inflation rates in the US.

Bitcoin continues volatile ride

Bitcoin (BTC) is continuing a volatile ride Wednesday morning, falling back down to values below the $30,000 mark.

Ethereum (ETH) followed BTC in the bullish trend declining by nearly 3.5% this morning and its value down to around $2017.

Note, cryptocurrency CFD trading is restricted in the UK for all retail clients.

Coinbase crypto exchange cuts back on hiring amid crypto market sell-off

One of the largest cryptocurrency exchanges, Coinbase, announced on Tuesday that it was forced to cut back on hiring new staff amid the vast crypto market sell-off that saw tokens trading in bearish values these past few weeks.

“Heading into this year, we planned to triple the size of the company. Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals,” Coinbase’s president, Emilie Choi, said in a post published on the company’s website.

Coinbase’s stock declined by around 80% compared to its initial public offering which stood at around $328 now down to $70. The firm, which depends on trading activity for a majority of its income, reported that it lost over $430 million during the first quarter of 2022.

Choi reassured that Coinbase is planning for all market scenarios and is starting to put some of those plans into action.

“We’re in a strong position — we have a solid balance sheet and we’ve been through several market downturns before, and we’ve emerged stronger every time,” she added.