Global markets found firmer footing as cooling US inflation, strong bank earnings and hopes for renewed diplomacy between the US and Iran helped calm investors despite ongoing geopolitical uncertainty.
Global financial markets ended the week on a firmer footing as investors looked past renewed tensions between the United States and Iran and instead focused on encouraging inflation data from the US, strong corporate earnings and signs that diplomatic discussions may resume.
While geopolitical risks continued to influence commodity prices and currencies, improving inflation figures reduced expectations of another immediate interest rate increase by the US Federal Reserve, helping lift sentiment across global equity markets.
According to Anchor Capital, US consumer inflation rose by just 0.2% month on month in June, below both market expectations and the previous month's reading of 0.5%, while producer inflation increased by only 0.1%.
"The US CPI disinflation print, alongside weak payrolls, significantly reduces the probability of an imminent Fed rate hike. Markets are now pricing the first Fed cut by September," Anchor Capital noted.
