Last week investors were focused on US inflation data and speeches from Federal Reserve officials. US stock performance was muted Monday-Wednesday while investors waited for the inflation data. In the event, Thursday’s release of the personal consumption expenditures price index, came in close to expectations and sparked a positive response from investors with stocks rallying strongly to end the week. The PCE data for January came in at a 2.8% annual rate showing that inflation is continuing to rise but is slowing.

European stocks held recent gains with the German DAX index out-performing. Asian markets were generally strong, particularly Japan.

Back in January there was an expectation from US investors for five or six rate cuts coming this year but recent employment numbers, inflation data and a surprisingly positive fourth-quarter earnings season have caused this to be pared right back. Numerous Fed officials spoke last week and all confirmed they saw no urgency to cut rates.

Eurozone inflation declined less than expected in February. Annual Core inflation fell to 3.1% from 3.3%.

US Risk Barometer 1st March 2024

Europe Risk Barometer 1st March 2024

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