OIL PRICE RISKS PUT INFLATION BACK IN FOCUS
BRUSSELS (TIP): Iraq will be foremost in investors’ minds in the coming week as oil price risk has returned to markets, complicating the task for central banks whose policies are beginning to diverge for the first time since the global financial crisis.
Oil prices neared nine-month highs late last week, touching $115 a barrel, and the rapid advance of militants in Iraq, the second-largest OPEC producer, is destabilizing oil markets. That has implications for inflation in the United States and Europe, as well as Asia’s export-oriented economies that are large net importers of oil.
Investors will be watching a range of data, from German and Japanese consumer prices to first-quarter US GDP, to see how the Federal Reserve, the European Central Bank (ECB), the Bank of England and the Bank of Japan respond. Investors will be watching a range of data, from German and Japanese consumer prices to first-quarter US GDP, to see how the Federal Reserve, the European Central Bank (ECB), the Bank of England and the Bank of Japan respond.
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