Inflationary pressure in the US continues to decline. Chinese inflation data disappointed investors

The Walt Disney Company (DIS) Co cut its streaming loss by $400 million quarter-on-quarter but also cut subscriber numbers. The quarterly profit was in line with Wall Street expectations. DIS stock fell nearly 5% after the stock market closed.

ECB spokesman Centeno indicated yesterday that ECB policy will remain tight for some time after rates peak, with rates set to start falling in 2024. Speaking Tuesday night, Isabel Schnabel, another ECB executive board spokeswoman, said the ECB would continue to raise borrowing costs with full determination until there are signs that core inflation is also falling steadily.

Today, the Bank of England will likely raise interest rates for the 12th time in a row. The market is almost unanimous in expecting the Monetary Policy Committee to choose another 25 basis point hike. But the outlook diverges further as the Bank of England faces a tougher situation: the UK is projected to be the worst major economy over the next two years, and inflation is still twice as high as in the US and the Eurozone.

Thomas Jordan, head of the Swiss National Bank (SNB), pointed out yesterday that inflation is above the price stability range. Meanwhile, the nominal appreciation of the Swiss franc is mainly due to inflation abroad. This increases the likelihood of another rate hike at the next SNB meeting.

Oil prices rebounded Thursday after falling more than a dollar a barrel the day before, helped by stronger US fuel demand data. A sharper-than-expected drop in US gasoline inventories pushed prices higher, reflecting more robust demand for transportation fuel in the United States.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.41% for the day, China’s FTSE China A50 (CHA50) fell by 0.99%, Hong Kong’s Hang Seng (HK50) was down 0.53% for the day, India’s NIFTY 50 (IND50) added 0.27%, and Australia’s S&P/ASX 200 (AU200) closed negative 0.12%.

China’s consumer price inflation fell short of expectations and has been declining for four straight months this year. The consumer price index was 0.1% year-on-year in April. The weak Consumer Price Index indicates that consumer spending has remained sluggish despite lifting COVID-19 restrictions earlier this year. Measures taken by the Chinese government to increase domestic spending have had little effect on inflation, as the economy has weakened after three years of lockdowns. Although levels of retail spending and travel demand in China have risen slightly in recent months, they remain well below levels seen before the COVID-19 pandemic. A weak inflation reading in April would likely entail additional stimulus and potentially looser monetary conditions in the country.