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(Bloomberg) — U.S. stock futures fell as investors prepared for a release of the Federal Reserve’s key inflation metric, which will help identify the path forward for interest rates. Bitcoin’s rally surpassed $63,000.
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Contracts for the S&P 500 and the tech-heavy Nasdaq 100 fell about 0.3%. European stocks fluctuated during another busy day on the earnings calendar. Moncler SpA rallied after the Italian luxury company’s profits beat expectations. Air France-KLM plunged after reporting a fourth-quarter loss. Anheuser-Busch InBev fell after missing analysts’ earnings estimates.
Traders await U.S. Core Personal Consumption Expenditure Gauge data due later on Thursday, which will likely highlight the bumpy road the Federal Reserve faces in achieving its 2% inflation target. The PCE reading is expected to validate recent comments from central bank officials showing no rush to ease monetary policy.
Russ Mould, chief investment officer at AJ Bell, said a higher-than-expected inflation reading “could put the final nail in the coffin of the idea of pivoting to rate cuts before the summer.”
In Asia, a gauge of the region’s stocks rose after a rally in Chinese stocks. The yen rose the most in more than a week against the dollar after Bank of Japan board member Hajime Takata signaled that the case for ending the negative interest rate policy is gaining momentum.
Bitcoin extended its gains after topping $60,000 for the first time in more than two years on Wednesday, reflecting new demand for exchange-traded funds. The currency almost touched $64,000. The 2021 all-time high is just below $69,000.
A gauge of the dollar weakened, while Treasury yields rose after a rally in bonds on Wednesday that saw the 10-year yield fall four basis points and the policy-sensitive two-year yield fall. six basic points.
Stocks are closing out a strong February, with the S&P 500 and Nasdaq 100 rising more than 4% after enthusiasm around artificial intelligence fueled an unprecedented technology-driven rush on Wall Street. MSCI Inc.’s global equity index is rising for a fourth month, its longest winning streak since 2021.
For Ulrich Urbahn, head of multi-asset strategy and research at Berenberg, trading on the last day of February is likely to be influenced more by month-end rebalancing than data, as inflation trends have already been discounted in the markets after this month’s consumption. and producer price reports.
“The focus on PCE ‘because that’s what the Fed cares about’ is valid,” Urbahn said. “But most of it is already baked into the cake. “Markets will be more affected by some rebalancing flows as stocks have massively outperformed bonds this year.”
New York Fed President John Williams said Wednesday that the central bank has “a way to go” in its battle against inflation and Atlanta Fed chief Raphael Bostic urged patience regarding policy adjustments.
Traders are currently pricing in around 80 basis points of easing by the end of the year, roughly in line with what officials indicated in December as the most likely outcome. That would be equivalent to three cuts in 2024, since the Federal Reserve’s actions have historically been increases of 25 basis points. To put things in perspective, swaps were projecting cuts of almost 150 basis points this year in early February.
This week’s key events:
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Germany CPI, Thursday
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US consumer income, PCE deflator and initial jobless claims, Thursday
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Federal Reserve’s Austan Goolsbee, Raphael Bostic and Loretta Mester speak Thursday
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China official PMI and Caixin manufacturing PMI, Friday
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Eurozone S&P Global Manufacturing PMI, CPI and Unemployment, Friday
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BOE Chief Economist Huw Pill Speaks Friday
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US Construction Spending, ISM Manufacturing, University of Michigan Consumer Sentiment, Friday
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Federal Reserve’s Raphael Bostic and Mary Daly speak Friday
Some of the main movements in the markets:
Stocks
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The Stoxx Europe 600 was up 0.1% at 9:21 a.m. London time
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S&P 500 futures fell 0.3%
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Nasdaq 100 futures fell 0.3%
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Dow Jones Industrial Average futures fell 0.4%
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The MSCI Asia Pacific index rose 0.4%
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The MSCI Emerging Markets Index rose 0.2%
Coins
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Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.0849
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The Japanese yen rose 0.6% to 149.80 per dollar
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The offshore yuan was little changed at 7.2087 per dollar.
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Sterling was little changed at $1.2663.
CRYPTOCURRENCIES
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Bitcoin rose 3.3% to $62,556.96
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Ether rose 4.2% to $3,461.75.
Captivity
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The 10-year Treasury yield rose three basis points to 4.29%
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The yield on the 10-year German bond rose two basis points to 2.48%
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The British 10-year yield rose two basis points to 4.20%
Raw Materials
This story was produced with the help of Bloomberg Automation.
–With the assistance of Chiranjivi Chakraborty and Richard Henderson.
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