Economy

The Fed vs. Inflation
US inflation unchanged – market now expects a hike

US inflation came in at an annual rate of 3.4 percent in August, as expected, according to new figures from the Bureau of Labor Statistics (BLS).

Friday’s inflation figure is the final piece of the puzzle for the Federal Reserve ahead of next week’s interest rate decision. Several Fed officials have signaled that the figure could be decisive for the outcome.

Prior to the CPI announcement, the market had priced in a probability of just over 67 percent for an interest rate hike on Wednesday. That figure rose to over 90 percent following the announcement, according to CME’s FedWatch.

The ECB vs. Inflation
Sources: ECB may hike again as early as October

The European Central Bank is preparing to raise interest rates further, possibly as early as its next meeting in October. This is reported by Bloomberg, citing sources familiar with the matter.

However, the sources state that the three hikes currently priced in by the market are an overestimation, the news agency writes.

Today, the ECB raised the deposit rate by 25 basis points to 2.5 percent. 

Fuel Prices
US diesel price hits new record – exceeds $6

The price of diesel in the US has climbed above $6 per gallon for the first time ever, Bloomberg reports.

One gallon is equivalent to 3.785 liters, translating to a price of around 15.50 kronor per liter. In Sweden, the price of diesel stands at 21.42 kronor per liter, according to Bensinpriskollen.se.

Factors behind the record price include disruptions in the Middle East and Ukrainian attacks on Russian refineries. Few Americans buy diesel directly, but the fuel is used for sectors such as transportation, agriculture, and construction. Consequently, the high price risks driving up food and shipping costs and fueling inflation, the news agency reports. 

Stock Market Today
Chinese Nvidia rival surges over 200 percent in market debut

Chinese AI chipmaker Enflame surged by just over 200 percent at its peak during its stock market debut on the Shanghai exchange on Friday. By the close of trading, the stock was up 181 percent from its issue price.

Demand was extreme, and the portion of the offering aimed at retail investors was initially oversubscribed more than 6,000 times, CNBC reports.

Investors are betting that domestic AI chipmakers will replace Nvidia in China, the network notes.

Tech giant Tencent is one of Enflame's major shareholders.

Retail Trends
Spanish H&M rival makes major push in the US

Inditex, the owner of Zara, is ramping up its efforts in the US—the group's second-largest market—through new store openings and the renovation of existing locations. The H&M competitor plans to undertake 20 projects in the country between now and the end of 2027, CEO Oscar Garcia Maceiras told Reuters.

The interest in the US stems from the market's size and importance.

"We are focusing on selective growth and ensuring that every store is profitable," Garcia Maceiras told the news agency. 

Households open their wallets again – retail sector picks up

Increased purchasing power among Swedish households has led to higher spending, boosting the retail sector, according to a new economic report from the Swedish Retail Institute (HUI).

"After years of deferring purchases, households are once again willing to buy furniture, appliances, and home décor," HUI writes, adding that the upturn is broader and stronger than anticipated.

At the same time, an interest rate hike by the Riksbank this autumn could potentially slow consumption once more.