stocks, news, U.S. inflation data

U.S. inflation posted its biggest monthly increase of the year in August, figures showed Wednesday, as the core consumer price index came in slightly hotter than expected.

Core CPI, which strips out food and energy and is closely monitored by the Federal Reserve, rose by 0.3% on the month and 4.3% on the year. Economists polled by Dow Jones signaled rises of 0.2% and 4.3%, respectively.

Headline CPI was up by 0.6% month-on-month, and up 3.7% from a year ago, versus estimates of 0.6% and 3.6%.

“Today’s uptick in CPI could slightly increase the likelihood of a November interest rate hike and potentially delay the timing of any rate cuts until deeper into 2024,” said Joe Tuckey, head of FX analysis at Argentex Group. “If the dollar cannot make further gains from this data, this may mark an interim top to the recent dollar rally.”

Markets expect the Fed to skip a rate hike this month, but put around a 40% probability on a hike in November, according to CME Group data.

— Jenni Reid

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, says there is a great deal of uncertainty about who’s going to take the top job on a full-time basis, and the market has been “incredibly supportive” of BP CEO Bernard Looney’s strategies.

Shares of British insurer Aviva were 2.5% higher at 11:17 a.m. London after it said it would sell its 25.9% stake in Singapore Life Holdings and two debt instruments for £800 million ($997 million).

British homebuilder Redrow climbed 4.7% as it beat a pre-tax profit estimate, even as the FTSE 250 firm said it expected the figure to fall by a half in the next financial year.

U.K. builders were broadly higher, with Persimmon up by 2.8% and Taylor Wimpey up 2%, despite recent data showing house prices falling at their fastest rate since 2009 and mortgages in arrears spiking.

Meanwhile, the business world digested the shock departure of BP CEO Bernard Looney.

Looney told the company that he had not been “fully transparent in his previous disclosures” about relationships with colleagues prior to becoming CEO.

Market reaction was muted, with BP shares 0.8% lower.

— Jenni Reid

Valentijn van Nieuwenhuijzen, global co-head of multi-asset solutions at Goldman Sachs Asset Management, says that’s given the state of the labor market and wage trends.

Autos stocks rose 2% in early trade before trimming gains to 1.2% despite broader negativity in markets.

The European Commission, the executive arm of the European Union, on Wednesday launched an investigation into subsidies given to electric vehicle makers in China.

Volvo and Renault topped the Stoxx 600, gaining 4.6% and 4.4%, respectively, while Volkswagen shares climbed 2.5%.

— Jenni Reid

U.K. gross domestic profit fell by 0.5% in July, below the 0.2% contraction forecast in a Reuters poll of economists.

Services output was the main drag, the Office for National Statistics said, declining 0.5%.

The economy put in a better-than-expected performance for the second quarter as a whole, with the ONS reiterating its reading of 0.2% growth.

It is the latest sign of economic strain amid higher interest rates. On Tuesday, figures showed U.K. mortgages in arrears jumped to a seven-year high in the three months to June.

Paul Dales, chief U.K. economist at Capital Economics, said the GDP figures may indicate a mild recession has begun and “underlying growth has lost momentum since earlier in the year.”

Dales highlighted…