Eyes on US inflation data, commodity prices rise

Global stocks climbed while Treasuries traded flat as investors awaited US inflation data for cues on the Federal Reserve’s next steps. European gas prices advanced on concern about potential industrial action in Australia. 

The Euro Stoxx 50 index added 1.2% and US equity futures pointed to gains after a tech-led drop in the previous session. Ten-year and two-year US government debt yields were little changed, while most currencies in a group of G-10 counterparts strengthened against the greenback, led by the New Zealand and Australian dollars.  

The US inflation print due later Thursday is expected show a slight uptick, driven by higher oil prices, while the core rate is forecast to fall, extending a downward trend that Bloomberg Economics believes will support a rate pause when the Fed next meets in September.

Traders are also closely watching rising commodity prices. European natural gas extended gains on Thursday, holding above €40 on concern possible industrial action in Australia that could disrupt global supply. Citigroup Inc. analysts predicted it could cause European gas and Asian LNG contracts for January to double.

Other raw materials have been on the rise, which could add to inflationary pressure. Crude oil is hovering near a nine-month high and rice surged to the highest level in almost 15 years this week. 

In Asia, shares in South Korea and China fell, with Hong Kong-listed tech companies among the day’s laggards. Focus was on Alibaba Group Holding Ltd.’s earnings due later in the day, as well as Chinese developer Country Garden Holdings Co.’s debt woes. Japanese and Australian shares posted modest gains.

US restrictions on Chinese investments are expected to be narrower than some had feared, as President Joe Biden imposed limits that would regulate investments in some Chinese semiconductor, quantum computing and artificial intelligence firms.  

Elsewhere, the Reserve Bank of India kept interest rates on hold as expected, leaving the Indian rupee little changed.

Key events this week:

• US initial jobless claims, CPI, Thursday
• Atlanta Fed President Raphael Bostic pre-recorded remarks for employment webinar, Thursday
• UK industrial production, GDP, Friday
• US University of Michigan consumer sentiment, PPI, Friday

Some of the main moves in markets:

STOCKS

• The Stoxx Europe 600 rose 0.6% as of 8:12 a.m. London time
• S&P 500 futures rose 0.5%
• Nasdaq 100 futures rose 0.6%
• Futures on the Dow Jones Industrial Average rose 0.4%
• The MSCI Asia Pacific Index rose 0.2%
• The MSCI Emerging Markets Index fell 0.1%

CURRENCIES

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.3% to $1.1009
• The Japanese yen was little changed at 143.87 per dollar
• The offshore yuan rose 0.1% to 7.2216 per dollar
• The British pound rose 0.2% to $1.2745

CRYPTOCURRENCIES

• Bitcoin rose 0.1% to $29,520.39
• Ether was little changed at $1,850.37

BONDS

• The yield on 10-year Treasuries was little changed at 4.01%
• Germany’s 10-year yield advanced two basis points to 2.52%
• Britain’s 10-year yield advanced two basis points to 4.39%

COMMODITIES

• Brent crude rose 0.1% to $87.66 a barrel
• Spot gold rose 0.3% to $1,920.12 an ounce

This story was produced with the assistance of Bloomberg Automation.

Related Topics: US inflation