Cooling Inflation, Easing Rate Bets & Crypto Win

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CAPITAL FLOWS IN GLOBAL MARKETS

After US inflation data this week showed clear signs of cooling, a wave of market euphoria that the Federal Reserve was reaching the end of its rate-hiking cycle helped Wall Street stocks to hold on to their weekly gains on Friday. At the same time, the dollar remained at 15-month lows.

Data showed US consumer inflation eased to a year low and the smallest increase in producer inflation in over two and a half years. US consumer confidence also rose to its highest level in almost two years, while Friday's government data showed that import prices fell 0.2% last month.

A global stocks gauge, the MSCI World Equity Index, maintained its position at the year's high and the highest level since the beginning of 2022. As expectations grew that the Fed's monetary tightening cycle was ending, European equities registered their greatest weekly gain since March.

However, the beginning of an earnings season offers a challenge to the global stocks surge in the second half of the year. The year's first half was good for stocks, but experts are starting to worry that the second half may be more difficult.