(Bloomberg) — European stocks ticked higher while Treasury yields steadied before a key reading on American inflation. U.S. futures fluctuated between losses and gains.
Miners and energy firms led modest gains on the the Stoxx 600 Europe Index. Contracts on the S&P 500 wavered after the stock gauge halted a five-day slide Tuesday. The 10-year Treasury benchmark trading held near 1.75%. The dollar was flat, while oil rose.
Fears that the expansion will be jeopardized by tighter policy to curb price pressures appear to have been allayed for now, after soothing words from Federal Reserve Chair Jerome Powell. Wednesday’s U.S. consumer price index print is expected to have quickened in December to 7.1%, the highest in four decades.
Markets have been buffeted by volatility at the start of the year on the prospect of faster interest-rate increases to deal with the surge in inflation. With three and possibly four rate increases now priced in, strategists are turning more sanguine and focusing on positives such as the start of the earnings season.
“Hawkish Fed repricing is likely largely done for now,” and “resilient earnings should help equities rebound,” Barclays Plc strategists led by Emmanuel Cau wrote in a note to clients on Wednesday.
Elsewhere, Hong Kong shares rose to the highest in about five weeks. Chinese technology stocks rallied as cheap valuations and the prospect of looser monetary conditions enticed buyers. Japan also gained, and Chinese shares edged higher after an inflation report fueled rate-cut calls to cushion an economic slowdown in the world’s second-largest economy.
Bitcoin traded above $42,500 after its roughest start to a year and ominous technical indicators.
Here are some key events this week:
- EIA crude oil inventory report on Wednesday.
- U.S. CPI, Fed Beige Book on Wednesday.
- U.S. initial jobless claims, PPI on Thursday.
- U.S. Senate Banking Committee hearing for Lael Brainard, nominated as Fed vice-chair on Thursday.
- Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker,
- Chicago Fed President Charles Evans speak on Thursday.
- Bank of Korea policy decision and briefing on Friday.
- Wells Fargo, Citigroup, JPMorgan due to report earnings on Friday.
- U.S. business inventories, industrial production, University of Michigan consumer sentiment, retail sales on Friday.
- New York Fed President John Williams speaks Friday.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.3% as of 9:18 a.m. London time
- Futures on the S&P 500 were little changed
- Futures on the Nasdaq 100 fell 0.2%
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index rose 1.6%
- The MSCI Emerging Markets Index rose 1.5%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1370
- The Japanese yen was little changed at 115.31 per dollar
- The offshore yuan rose 0.1% to 6.3704 per dollar
- The British pound was little changed at $1.3629
Bonds
- The yield on 10-year Treasuries advanced one basis point to 1.75%
- Germany’s 10-year yield was little changed at -0.03%
- Britain’s 10-year yield was little changed at 1.17%
Commodities
- Brent crude rose 0.6% to $84.25 a barrel
- Spot gold fell 0.4% to $1,815.20 an ounce
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