(Bloomberg) — Stocks traded mixed ahead of key U.S. inflation data on Wednesday as concerns grow that President-elect Donald Trump’s proposed tariffs and his picks for key positions could spark a resumption of price growth.
Most read from Bloomberg
The Stoxx 600 index recorded small movements in the European open session. The S&P 500 and Nasdaq 100 futures fell, as traders digested Trump’s Cabinet appointments, which will likely follow “America First” policies on borders, trade, national security and the economy. The Bloomberg Dollar Spot Index rose with Treasury yields.
US data due later today may reinforce concerns about accelerating inflation, with analysts predicting that the overall CPI may rise by 0.2% for the fourth month. With the new US administration expected to pursue inflationary policies such as tariffs, traders are now pricing in lower interest rate cuts by the Fed next year.
The Fed is easing policy in an environment where inflation is already slightly above target in the United States, Henry Allen, a strategist at Deutsche Bank, told Bloomberg TV.
“You add on top of that the risk of tariffs in the next couple of years and fiscal stimulus, and if you’re trying to build an inflationary recipe — it’s very similar to what we’re seeing now,” he said.
Minneapolis Federal Reserve Bank President Neel Kashkari said on Tuesday that he will watch US inflation data closely to determine whether another interest rate cut is appropriate at the US central bank’s December meeting. Traders expect about two cuts in US interest rates during the month of June, compared to about four cuts at the beginning of last week.
The US election results are still reverberating around the world, with MSCI’s gauge of ex-US stocks recording its worst day since the global debacle on August 5. The index of developing market currencies lost more than 1% after the vote, coming close to erasing this year’s gains.
In currencies, the yen fell below 155 yen to the dollar for the first time since July, raising the risk of Japan entering the currency market in an attempt to slow the currency’s decline. Bitcoin fell after a chart-busting rally sent the digital asset soaring to nearly $90,000 for the first time.
Elsewhere, oil held near its lowest levels this month, with demand forecasts in focus after OPEC cut its forecast on a China slowdown. Rose gold.
Main events this week:
-
Industrial production in the eurozone, Wednesday
-
US Consumer Price Index, Wednesday
-
Speakers at the Fed include Jeffrey Schmid, Lori Logan, Neel Kashkari and Alberto Muslim on Wednesday.
-
Eurozone GDP, Thursday
-
US Producer Price Index, Unemployment Claims, Thursday
-
Walt Disney earnings Thursday
-
Fed speakers include Jerome Powell, John Williams and Adriana Kugler on Thursday
-
China Retail Sales, Industrial Production, Friday
-
US Retail Sales, Imperial Manufacturing, Industrial Production, Friday
Some key movements in the markets:
Stocks
-
The Stoxx Europe 600 was little changed as of 8:33 a.m. London time
-
S&P 500 futures fell 0.2%
-
Nasdaq 100 futures fell 0.2%
-
Dow Jones Industrial Average futures fell 0.3%
-
MSCI Asia Pacific Stock Index fell 1.1%
-
MSCI Emerging Markets Index fell 0.6%
Currencies
-
The Bloomberg Dollar Spot Index was little changed
-
The euro fell 0.2 percent to $1.0603
-
The Japanese yen fell 0.3 percent to 155.12 yen to the dollar
-
The yuan in external transactions rose 0.1 percent to 7.2345 per dollar
-
There was little change in the pound sterling at $1.2738
Cryptocurrencies
-
Bitcoin fell 0.7% to $87,733.2
-
Ethereum fell 3.1% to $3,178.13
Bonds
-
The yield on 10-year Treasury bonds was little changed at 4.43%.
-
The yield on 10-year German bonds rose two basis points to 2.38%.
-
The yield on British 10-year bonds rose two basis points to 4.52%.
Goods
-
There was little change in Brent crude
-
Spot gold rose 0.4 percent to $2,608.38 per ounce
This story was produced with assistance from Bloomberg Automation.
Most read from Bloomberg Businessweek
©2024 Bloomberg L.P