(Bloomberg) — U.S. futures rose on Friday as traders awaited key inflation data and weighed the economic threat of the omicron variant.
Contracts rose after benchmarks ended a three-day rally. Europe’s Stoxx 600 Index pared an earlier decline, while a Bloomberg gauge of Asian airlines fell. The dollar, Treasury yields and oil advanced.
Investors are looking to the inflation report and a meeting of the Federal Reserve next week for clues on the pace of tapering and interest rate increases, after Chairman Jerome Powell said the central bank should consider withdrawing stimulus at a faster pace. November’s Consumer Price Index may show the highest rate of inflation since 1982, according to Bloomberg Economics.
Meanwhile, the U.S. appears to be headed for a holiday crisis as virus cases and hospital admissions climb, while London firms started telling thousands of staff to work from home and cities around the world imposed restrictions. The omicron strain may be spreading faster in England than in South Africa, though overall European Union numbers look to have hit a plateau.
“Various FOMC participants, including Chair Powell, have signaled a hawkish shift in their policy stance, catalyzed by increasing discomfort with elevated inflation against a backdrop of robust growth and ongoing strengthening in labor markets conditions,” Morgan Stanley economists and strategists including Ellen Zentner, wrote in a note Thursday. “We revise our Fed call and now expect the FOMC to begin raising rates in Sept. 2022 — two quarters earlier than our prior forecast.”
Among company moves, Oracle shares surged in premarket trading after the software firm’s sales beat estimates, while Tesla fell after Elon Musk offloaded more of his stake in the electric vehicle maker. Getty Images agreed to merge with a blank-check firm backed by CC Capital and Neuberger Berman, returning a company to the public market.
In Europe, Daimler AG’s trucks division gained in its first trading day as the storied German manufacturer completed a historic spinoff to better face sweeping changes in the auto industry. Polish retailer LPP rose to a record.
Separately, China Evergrande Group Chairman Hui Ka Yan was forced to sell pledged shares in the company, according to disclosures that came a day after the developer was officially labeled a defaulter for the first time. Chinese artificial intelligence firm SenseTime Group Inc. is delaying its Hong Kong initial public offering, according to people familiar with the matter.
China’s central bank took further steps to limit the yuan’s strength — setting the weakest reference rate relative to estimates compiled by Bloomberg since 2018 — a day after policy makers raised the foreign currency reserve requirement ratio for banks a second time this year.
In other news, the U.S. government moved a step closer to prosecuting Julian Assange on espionage charges, after London judges accepted that the WikiLeaks chief can be safely sent to America.
Bloomberg’s Markets Live team is running a survey on asset views for 2022. It’s anonymous, takes about 2 minutes, and the results will be shared in the latter part of December. To participate, click here.
Here are some key events to watch this week:
- U.S. CPI Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets as of 7:12 a.m. in London:
Stocks
- Futures on the S&P 500 rose 0.3% as of 7:15 a.m. New York time
- Futures on the Nasdaq 100 rose 0.3%
- Futures on the Dow Jones Industrial Average rose 0.3%
- The Stoxx Europe 600 fell 0.2%
- The MSCI World index fell 0.6%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.2% to $1.1275
- The British pound fell 0.1% to $1.3204
- The Japanese yen fell 0.2% to 113.73 per dollar
Bonds
- The yield on 10-year Treasuries advanced one basis point to 1.51%
- Germany’s 10-year yield advanced two basis points to -0.33%
- Britain’s 10-year yield advanced three basis points to 0.78%
Commodities
- West Texas Intermediate crude rose 1% to $71.63 a barrel
- Gold futures fell 0.2% to $1,773.30 an ounce
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