Equity traders pounced on the weaker-than-expected US CPI data as the Federal Reserve might not be as hawkish as initially feared.
Stock markets in the US are up as the dip in bond yields have paved the way for the bulls to take centre stage.
It has been a choppy 24 hours in the markets as the Fed Reserve carried out a dovish hike yesterday, and today’s GDP report suggests the country is now in a recession.
Stock markets in Europe mostly finished in the red due to worries about an energy shortage.
Worries about inflation are gathering pace as the US producer price index (PPI) rate jumped to 11.3%, close to its record high.
The jump in the US inflation rate triggered major volatility in the markets as traders now feel the Federal Reserve will be even more hawkish than previously expected.
A dip in government bond yields has paved the way for bargain hunters to swoop in and snap up European equities.
Stock markets in Europe are on track to finish higher as bullish sentiment is doing the rounds.
Last Friday, the S&P 500 rallied over 3% but now things have cooled a little. The slight tick higher in bond yields seems to be applying pressure to stocks.
Once again, the mood on Wall Street is setting the tone for Europe as the impressive rebound in US stocks are helping equities on this side of the Atlantic.
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