(Bloomberg) — Stocks entered a holding pattern on Thursday ahead of U.S. inflation data that could provide clues to the Federal Reserve’s policy path.
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The Stoxx 600 index and S&P 500 futures were flat after the main US stock gauge hit its 44th record high this year, led by the big tech sector in the previous session. Government bonds held steady while oil prices rose as traders waited for an Israeli response to Iran’s missile attack. The Bloomberg Dollar Spot Index and the euro were little changed.
US consumer price data is expected to show further moderation in inflation, supporting expected Fed easing in coming months. But in the wake of surprisingly strong job growth for September reported last Friday, the gradual slowing of price pressures suggests policymakers will opt for a smaller rate cut when they meet next month – or not cut at all.
Minutes from the last policy meeting showed that a majority of FOMC minutes supported a 50 basis point cut, although some officials favored cutting rates more gradually.
Meanwhile, Chinese shares rose after the release of details of stimulus measures, with China’s central bank setting up a swap facility to provide liquidity for institutional investors to buy shares. Investors in China will look to a Finance Ministry press conference on Saturday for clues on the fiscal stimulus measures.
“After a few days of heavy profit taking, we expect the offshore market to move into the second phase of the rally, with slower gains and higher volatility, but with the basics – profits and valuations – coming back to the fore,” said Richard Tang. , China Strategist and Head of Research Hong Kong at Julius Baer Group Ltd.
In France, Prime Minister Michel Barnier’s government will present budget details to his cabinet in Paris on Thursday evening. It is expected to be a first round of shock therapy to tackle rising deficits, aiming to reassure skeptical bond investors and sidestep strong opposition in a fractured parliament.
READ: Hedge funds sold a record amount of Chinese stocks on Tuesday, Goldman says
Crude oil rose after a two-day decline, with Brent trading near $77 a barrel. The market remains tense over Israel’s intentions to launch a retaliatory attack against Tehran, raising fears of an all-out war. Iran has warned it is prepared to launch thousands of missiles if necessary.
President Joe Biden has discouraged an attack on Iran’s oil infrastructure and spoke with Israeli Prime Minister Benjamin Netanyahu on Wednesday for the first time in more than a month.
Main events this week:
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US CPI, initial unemployment claims, Thursday
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John Williams and Thomas Barkin of the Fed will speak on Thursday
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JPMorgan and Wells Fargo kick off earnings season for the major Wall Street banks on Friday
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U.S. PPI, University of Michigan Consumer Confidence, Friday
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The Fed’s Lorie Logan, Austan Goolsbee and Michelle Bowman will speak Friday
Some of the major moves in the markets:
Stocks
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The Stoxx Europe 600 rose 0.1% as of 8:13 a.m. London time
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Futures on the S&P 500 were little changed
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Nasdaq 100 futures were little changed
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Futures on the Dow Jones Industrial Average were little changed
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The MSCI Asia Pacific Index rose 0.6%
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The MSCI Emerging Markets Index rose 0.6%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0938
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The Japanese yen rose 0.2% to 149.06 per dollar
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The offshore yuan rose 0.1% to 7.0825 per dollar
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The British pound was little changed at $1.3078
Cryptocurrencies
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Bitcoin rose 1.1% to $61,076.07
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Ether rose 2.1% to $2,404.57
Bonds
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The yield on 10-year government bonds was little changed at 4.07%
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The German ten-year yield rose by one basis point to 2.27%
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The British ten-year yield rose by two basis points to 4.20%
Raw materials
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Brent crude rose 0.4% to $76.91 per barrel
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Spot gold rose 0.2% to $2,611.90 an ounce
This story was produced with the help of Bloomberg Automation.
–With help from Abhishek Vishnoi and Masaki Kondo.
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