(Bloomberg) — U.S. equity futures inched higher as investors digested the latest read on American inflation and assessed bets on timing for the first Federal Reserve rate increases in the pandemic era.
Contracts on both the S&P 500 and Nasdaq 100 rose modestly, with those on the tech-heavy Nasdaq outperforming. The Stoxx Europe 600 Index paused after a two-day advance, with technology and miners offsetting declines in travel and leisure and consumer products.
The pound advanced to its highest level since Oct. 29 despite calls for U.K. Prime Minister Boris Johnson to resign over a “bring your own bottle” party at the height of a lockdown meant to stem the first wave of coronavirus infections in 2020.
The dollar extended its slide as a growing tide of investors bet the world’s reserve currency has reached a peak with expectations of Fed rate liftoff largely priced-in to the market. The greenback also underperformed all its Group of 10 peers.
Read more: Sell Dollar for Everything Else Is Echoing Across Trading Rooms
The Bloomberg Dollar Spot Index slipped about 0.1%, extending its steepest drop since May following the release of inflation data Wednesday that confirmed a consensus view that the Fed will embark on a series of hikes starting in March.
The U.S. inflation read came after Fed Chair Jerome Powell vowed to contain the worst price pressures in nearly four decades without derailing the economic recovery from the pandemic. In prepared remarks, Fed Governor Lael Brainard said tackling inflation while sustaining an inclusive recovery is the U.S. central bank’s most pressing task.
Elsewhere, Bitcoin traded around $44,000 as the inflation numbers rekindled the debate about whether the cryptocurrency is a hedge against rising consumer prices.
Here are some key events this week:
- 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
- Futures on the S&P 500 were little changed as of 5:51 a.m. New York time
- Futures on the Nasdaq 100 rose 0.1%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 was little changed
- The MSCI World index was little changed
Currencies
- The Bloomberg Dollar Spot Index fell 0.09%
- The euro rose 0.2% to $1.1462
- The British pound rose 0.3% to $1.3741
- The Japanese yen was little changed at 114.54 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.75%
- Germany’s 10-year yield was little changed at -0.06%
- Britain’s 10-year yield was little changed at 1.14%
Commodities
- West Texas Intermediate crude was little changed
- Gold futures fell 0.3% to $1,822 an ounce
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