The biggest single event of the week is the release of U.S Consumer Price Index data at 7:30 am CT Wednesday. The Core CPI read, which excludes food and energy, may not be known as the Federal Reserve’s preferred inflation gauge but it is arguably the most important. December’s read in January was a bright spot with a month over month increase of 0.3%.
Crude oil prices are soaring back after getting smashed on last week’s stock market correction. Of course, all the selling in stocks and oil are not about what is happening now but what may or may not happen in the future.
It has certainly been a chaotic trading week for the global equity markets amid fears of mounting inflationary pressures and higher interest rates. Asian shares suffered heavy losses during early trading on Friday following Wall Street’s steep declines overnight.
Thursday's European Central Bank Economic Bulletin was very upbeat calling for a continued expansion of growth “beyond the near term.” Though they did see downside risks due to foreign exchange markets, as expected.
Many are saying that U.S. oil prices are falling due to the projections for rising U.S. production. Predictions by the IEA and the EIA about a surge in oil suggest that U.S. oil production, which supposedly stands above 10 million barrels a day, will soon exceed 11 million barrels a day. Yet, the truth is that if demand growth stays at the rate we are currently at, then we will need that additional oil to meet global demand. Still, worries about global growth in recent days surrounding the stock market correction are causing some to think an oil demand slowdown is in store.
The biggest story this week has undoubtedly been the big falls in the stock markets. The Dow Jones Industrial Average index fell by more than 1,000 points for the second time this week on Thursday. Similar sharp declines have been evident in other major global indices. Friday was no different as the major European indices sold off across the board this morning, before bouncing back ahead of the U.S. open.