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(Bloomberg) — Global stocks rose as investors awaited U.S. inflation data that could help clarify the Federal Reserve’s policy direction.
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Europe’s Stoxx 600 index rose 0.5%, and U.S. stock futures showed the S&P 500 and Nasdaq 100 indexes are on track to extend Wednesday’s gains. As Japanese stocks hit a new 30-year high, Asian stock prices rose. U.S. Treasuries rose, but the dollar weakened against the Group of Ten (G10) nations.
The US inflation report will be a top concern for traders on Thursday. Further evidence of declining price pressures would support optimism about expectations for Fed rate cuts, but hot expectations could increase volatility. Economists tracked by Bloomberg expect December data to show year-on-year core inflation falling to 3.8% from 4% the previous month.
Stuart Cole, chief macroeconomist at Equity Capital in London, said: “Confirmation that prices are easing will increase confidence that we can expect a rate cut in May, leading to some gains in stocks and bonds.” There is a possibility that it will be encouraged.” “But the underlying he needs to be aware of the CPI component. If service prices are still going in the wrong direction, the rise could stall.”
Cryptocurrency stocks rose in pre-market trading in the U.S. after the Securities and Exchange Commission approved the first exchange-traded fund to invest directly in Bitcoin. The largest cryptocurrency briefly reached $47,000 in a quiet rally after the green light. The largest digital currency had already soared more than 160% in the past 12 months in anticipation of ETFs and easy monetary policy.
Other individual stocks rose after Tesco, Britain’s largest retailer, raised its profit outlook. Marks & Spencer Group had a strong Christmas sales period but fell after disappointing results from its international business and joint venture with Ocado Group.
In Asia, Japan’s benchmark index hit a new 30-year high, partly due to the recent depreciation of the yen. Strategists also said newly introduced tax-free retirement savings programs could help attract domestic capital inflows into the market.
Ikuo Mitsui, a fund manager at Aizawa Securities, said, “Overall, the recent rally shows that both domestic individual investors and overseas investors are being forced to change their attitudes toward Japanese stocks to be more positive.” Stated. Investors who were late to the market are buying as the index rises. ”
Investors are bracing for wild swings in U.S. Treasuries when U.S. consumer price data is released later. Bond traders have scaled back bets on U.S. Treasuries rising this month, with swap markets showing it is less likely the Fed is expected to cut rates before March, compared with pricing at the end of last year. ing.
New York Fed President William Williams said Fed officials need to assess further signs of economic weakness before cutting rates, but noted that current policy levels are sufficient to bring inflation back to the central bank’s target. The tone of his comments is a departure from his comments on December 15, when he said the short-term question was whether policy was “restrictive enough” to ensure inflation returned to 2%. He added at the time that officials were “not really talking about rate cuts.”
But JPMorgan Asset Management says the slowing U.S. economy could prompt the Fed to cut interest rates further than currently indicated, which could spur a rise in short-maturity U.S. debt. .
Amid ongoing tensions in the Middle East, oil prices rose and so did gold prices.
This week’s main events:
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US CPI, new unemployment claims, Thursday
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China CPI, PPI, Trade, Friday
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UK industrial production, Friday
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US PPI, Friday
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Some of the largest U.S. banks will release fourth-quarter financial results on Friday.
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Minneapolis Fed President Neel Kashkari speaks on Friday
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ECB Chief Economist Philip Lane speaks on Friday
The main movements in the market are:
stock
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As of 9:22 a.m. London time, the Stoxx European 600 was up 0.5%.
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S&P 500 futures rose 0.2%
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Nasdaq 100 futures rose 0.4%
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Dow Jones Industrial Average futures rose 0.2%.
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MSCI Asia Pacific Index rose 1.1%
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MSCI Emerging Markets Index rose 0.6%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0967.
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The Japanese yen rose 0.1% to 145.56 yen to the dollar.
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The offshore yuan rose 0.2% to 7.1720 yuan to the dollar.
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The British pound was almost unchanged at $1.2751.
cryptocurrency
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Bitcoin rose 0.8% to $46,312.06
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Ether rose 3.3% to $2,611.6
bond
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The 10-year Treasury yield fell 4 basis points to 3.99%.
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German 10-year bond yield remains unchanged at 2.22%
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UK 10-year bond yields fell 2 basis points to 3.80%.
merchandise
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Brent crude rose 1.3% to $77.78 per barrel
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Spot gold rose 0.3% to $2,031.46 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Richard Henderson and Chiranjivi Chakraborty.
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