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Market Review

US: Stocks rallied and bond yields fell after the latest US inflation reading reinforced speculation the Fed Reserve will be able to deploy its widely anticipated interest-rate cut in Sep.

Asia:

Stocks in Asia followed a rally on Wall Street after the latest US inflation data reinforced bets that the Fed Reserve will be able to start its monetawry easing in Sep.

India:

Benchmark Indian equity indices ended lower in the second consecutive session to log their worst session since August 5 as shares of banks weighed on them. Market is expected to open on a flattish note and likely to witness range bound move during the day.

Global Economy:

U.S. producer prices growth slowed more than expected on an annual basis in July, in the latest sign of cooling inflationary pressures.The producer price index for final demand grew 2.2% annually last month, a fall from a revised 2.7% in June, according to Labor Department data. On a monthly basis, the PPI figure rose by 0.1%, less than expected and below the 0.2% growth seen in June. The Brazilian real has recently experienced "accelerated" weakening, but central bank chief Roberto Campos Neto said on Tuesday that policymakers did not intervene in the foreign exchange market as no dysfunctions were observed. Speaking at a congressional hearing, Campos Neto said specific Brazilrelated factors caused this greater depreciation, amid heightened risk perceptions. The currency of Latin America's largest economy has weakened by nearly 12% against the U.S. dollar this year, though it has shown some relief since last week amid the central bank's firm messaging that an interest rate hike is on the table to battle inflation. Campos Neto said the central bank's disinflation process has minimally impacted economic activity, which has consistently surprised on the upside.

Commodities:

The price of gold fluctuated between gains and losses after US inflation data came in lower then expected, potentially supporting the case for rate cuts by the Federal Reserve. Oil prices climbed on Wednesday on estimates about shrinking U.S. crude and gasoline inventories as the market watched for a possible widening of the Middle Eastern war, which could curtail global oil supplies.

Currency:

The dollar remained on the back foot on Wednesday after tumbling versus major peers overnight as a benign reading for U.S. producer prices reinforced bets on Federal Reserve interest rate cuts this year.

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