After two consecutive ‘’down days’’ U.S. equity markets rose yesterday as investors digested jobs and inflation data, with the Dow leading the recovery, closing higher by 1.29%. Weekly Jobless Claims hit another new post-pandemic low. That marked the second straight week and the third time in the last month that Jobless Claims have hit a pandemic-era low. This is a strong sign for the labour market’s recovery. On the inflation side, Producer Price Index (“PPI”) data for April rose more than expected on both a month-over-month and year-over-year basis. Again, this fuels the fears of runaway inflation forcing the Federal Reserve to raise rates. But unlike Wednesday, these concerns did not lead to a sharp sell-off. Instead, markets rose, likely with the focus on the Federal Reserve stressing that the inflation is temporary. Fed Governor Christopher Waller said that multiple months of data were still needed to get a clear picture on the central bank’s policy stance. In terms of reopening, the CDC said that vaccinated individuals do not need to mask or distance, which would help accelerate a return to normal. European Markets closed lower after a volatile session. Regional financial institutions are lobbying the European Central Bank to extend pandemic-driven capital relief measures beyond the June 27 deadline in order to support lending growth. Italian Prime Minster Mario Draghi called on the European Union to ease debt rules as a way to promote increased fiscal spending and support growth The European Medicines Agency said it is confident that current COVID-19 vaccines work against the new variant coming out of India. In Asia, Bank of Japan Governor Haruhiko Kuroda said that the Japanese economy would remain below pre-pandemic levels for some time. China’s money supply growth data for April were weaker than expected, falling versus March, as the People’s Bank of China has encouraged banks to slow loan growth. Japanese investors’ worries about valuations increased after investing and technology giant Softbank’s earnings raised concerns about continued share buybacks. Elsewhere, Oil closed 35% lower after Colonial said its pipeline would be mostly back online by the end of the week, while Bitcoin fell 10% after Tesla CEO Elon Musk said the company would halt acceptance of bitcoin payments.
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