Stocks flat as traders await US inflation data: Markets wrap

(Bloomberg) — Stocks settled into a holding pattern Thursday ahead of U.S. inflation data that could provide clues about the Federal Reserve's policy path.

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The Stoxx 600 and S&P 500 futures traded flat, after the main US stock gauge hit its 44th record high this year led by big technology companies in the previous session. Treasury bonds were stable, while oil rose as traders awaited an Israeli response to the Iranian missile attack. The Bloomberg Spot Dollar and Euro Index was little changed.

US consumer price data is expected to show further moderation in inflation, supporting expected easing from the Federal Reserve in the coming months. But in the wake of surprisingly strong September job growth reported last Friday, a gradual slowdown in price pressures suggests policymakers will opt for a smaller rate cut when they meet next month — or even no cut at all.

Minutes from the latest policy meeting showed that a majority of FOMC minutes supported a 50 basis point cut, although there was a preference among some officials to cut interest rates at a more gradual pace.

Meanwhile, Chinese stocks jumped after details of stimulus measures were published, with China's central bank setting up swap facilities to provide liquidity to institutional investors to buy shares. Investors in China will look to a Finance Ministry press conference on Saturday for clues about fiscal stimulus.

“After a few days of heavy profit-taking, we expect the offshore market to move into the second phase of the rally, characterized by slower gains and higher volatility but with a focus back on fundamentals – earnings and valuations,” Richard Tang said. , China strategist and Hong Kong head of research at Julius Baer Group Ltd.

In France, Prime Minister Michel Barnier's government will present budget details to his government on Thursday evening in Paris. This is expected to be an initial round of shock therapy to address the ballooning deficit, aiming to reassure skeptical bond investors and overcome strong opposition in a divided parliament.

Read: Hedge funds sold record Chinese stocks on Tuesday, Goldman says

The price of crude oil rose after a two-day decline, with Brent crude trading near $77 per barrel. The market remains nervous about Israel's intentions to launch a retaliatory strike against Tehran, which has raised concerns about an all-out war. Iran warned that it is ready to launch thousands of missiles if necessary.

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President Joe Biden thwarted an attack on Iranian oil infrastructure, speaking with Israeli Prime Minister Benjamin Netanyahu on Wednesday for the first time in more than a month.

Main events this week:

• US Consumer Price Index, Initial Jobless Claims, Thursday

• The Fed's John Williams and Thomas Barkin speak on Thursday

• JPMorgan and Wells Fargo kick off earnings season for Wall Street's big banks on Friday

• US Producer Price Index, University of Michigan Consumer Confidence, Friday

• The Fed's Lori Logan, Austin Goolsby and Michelle Bowman speak on Friday

Some key movements in the markets:

Stocks

• The Stoxx Europe 600 Index was up 0.1% as of 8:13 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures were little changed

• Dow Jones Industrial Average futures were little changed

• MSCI Asia Pacific Stock Index rises 0.6%

• MSCI Emerging Markets Index rises 0.6%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• There was little change in the euro at $1.0938

• The Japanese yen rose 0.2 percent to 149.06 yen to the dollar

• The yuan in external transactions rose 0.1 percent to 7.0825 to the dollar

• There was little change in the pound sterling at $1.3078

Cryptocurrencies

• Bitcoin rose 1.1% to $61,076.07

• Ethereum rose 2.1% to $2,404.57

Bonds

• The yield on 10-year Treasury bonds was little changed at 4.07%.

• The yield on German 10-year bonds rose by one basis point to 2.27%.

• The yield on British 10-year bonds rose two basis points to 4.20%.

Goods

• Brent crude rose 0.4 percent to $76.91 a barrel

• Spot gold rose 0.2 percent to $2,611.90 an ounce

This story was produced with assistance from Bloomberg Automation.

–With assistance from Abhishek Vishnoi and Masaki Kondo.

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