Inflation appears to be one of the hottest keywords in the financial markets today, as several important inflation rate reports are due.
First off, Germany published its final inflation data for June. The YoY inflation rate was 2.3%, while the monthly number was 0.4%, both exactly as forecasted, so no surprises there.
France, the second largest economy in the European Union, also met the inflation target of 1.5%.
But the most important inflation readings will come from the United States later today. The June CPI is expected to be 4%, while the YoY inflation rate is forecast to be 4.9%. If the real numbers are higher than expected, the US dollar can really take off because super high inflation will likely mean an early tapering of asset purchases by the Federal Reserve.
Meanwhile, investors are also beginning to get excited about the upcoming earnings reports from the second quarter of 2021. The markets will hear how well companies like Pepsi have been doing. Some major US banks will also report their profits today, including JPMorgan and Goldman Sachs.
Other names to keep an eye on today include Google and Johnson & Johnson. Google’s parent company was fined 600 million US dollars by the French government regarding violations of the rights of local news agencies.
Meanwhile, Johnson & Johnson is also in trouble because its single-shot Covid-19 vaccine is now being linked to another complication. Like AstraZeneca’s drug, the J&J vaccine was already found to cause extremely rare blood clots, but now there are new side effects coming to light.
All major US stock indices will trade in a subdued manner in anticipation of the June inflation data, so don’t expect any gains there.
In other news, France is changing the face of the post-pandemic world by adopting new measures to encourage vaccination. President Macron announced that people will have to show proof of vaccination or a recent Covid-19 infection in order to enter many public venues or use public transport. All medical personnel will also be subjected to mandatory vaccinations. This move may set the stage for other countries to adopt more measures to make life easier for people who are vaccinated to encourage more people to get the shot.
