(Bloomberg) — Stocks fell on speculation that U.S. inflation data may show price pressures remain sticky, increasing the risk that policymakers will keep interest rates high for an extended period of time. .
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Europe’s Stoxx 600 index fell 0.4%, and German federal bonds also fell. Money markets are betting on policy tightening at the European Central Bank’s (ECB) Thursday meeting, after Reuters reported that the European Central Bank (ECB) expects inflation to exceed 3% next year. Bets are rising, with investors pricing in a quarter-point rise by the end of the year. The pound widened its decline to a three-month low as Britain’s economy contracted at its fastest pace in seven months.
Traders are keeping an eye on U.S. consumer price data, with the data expected to send mixed messages about the U.S. economy, according to Bloomberg Economics. The monthly headline inflation rate is expected to be 0.6%, while annualized core inflation is expected to remain near the Fed’s 2% target for the third consecutive month.
“All eyes are on the US core CPI in the second half of today,” said Chetan Seth, strategist at Nomura Holdings in Singapore. “With oil prices up more than 10% in just over two weeks, equity investors will be hoping for no punchy inflation readings tonight. This is because it has the potential to support
West Texas Intermediate rose for the second day in a row, with Brent extending its gains above $92 a barrel as OPEC+ leaders’ production cuts strengthened prospects for the tightest supply in a decade. Spread it out.
U.S. stock futures edged lower after Tuesday’s selloff in technology companies, with the Nasdaq 100 down 1.1%. Apple, which announced the iPhone 15 and other products, fell nearly 2%.
The two-year bond yield, which is more sensitive to Fed policy than longer-term bonds, hovered above 5%, but the 10-year bond yield remained at 4.29%. An auction of 10-year U.S. bonds on Tuesday hit the highest yield since 2007 as investors demanded additional compensation for higher inflation and increased bond issuance.
Ahead of the CPI data, the dollar traded in a narrow range against the Group of Ten (G10) countries. The yen fell for the second day in a row.
In Asia, benchmark stock indexes led by tech stocks closed at their lowest in almost a week after Apple Inc.’s sharp selloff on Tuesday.
Meanwhile, there has been a “dramatic shift” in investors’ stock allocations, with a rush to invest in the U.S. and outflows from emerging markets, according to Bank of America’s latest global fund. This was revealed in a survey of managers.
This affected the allocation to emerging market stocks, which fell from 34% to a net 9% overweight in September, the lowest level since November 2022. In contrast, allocations to U.S. stocks rose 29 percentage points to a net overweight of 7%. According to the survey, this is the first time that he has been overweight since August last year.
Chinese real estate developers have rallied following news that Country Garden Holdings has won support from creditors to extend repayments on its 7 yuan bond.
This week’s main events:
Eurozone industrial production, Wednesday
UK industrial production Wednesday
US CPI, Wednesday
Technology leaders including Tesla’s Elon Musk and Meta Platforms’ Mark Zuckerberg are scheduled to attend a forum on the future of AI convened by Sen. Chuck Schumer on Wednesday.
Japan’s industrial production Thursday
Thursday’s European Central Bank Policy Meeting and Press Conference by President Christine Lagarde
U.S. Retail Sales, PPI, Business Inventories, New Unemployment Insurance Claims, Thursday
China real estate prices, retail sales, industrial production, Friday
US Industrial Production, University of Michigan Consumer Sentiment, Empire Manufacturing Index, Friday
stock
As of 8:10 a.m. London time, the Stoxx European 600 was down 0.5%.
S&P 500 futures fell 0.1%
Nasdaq 100 futures little changed
Dow Jones Industrial Average futures little changed
MSCI Asia Pacific Index falls 0.2%
MSCI Emerging Markets Index falls 0.2%
currency
Bloomberg Dollar Spot Index little changed
The euro fell 0.2% to $1.0734.
The Japanese yen fell 0.1% to 147.24 yen to the dollar.
The offshore yuan rose 0.1% to 7.2911 yuan to the dollar.
The British pound fell 0.3% to $1.2447.
Cryptocurrency
Bitcoin fell 0.4% to $25,979.25.
Ether fell 0.6% to $1,588.86.
bond
The 10-year government bond yield was almost unchanged at 4.29%.
Germany’s 10-year bond yield rose 2 basis points to 2.66%.
UK 10-year bond yields were little changed at 4.41%.
merchandise
Brent crude rose 0.2% to $92.28 per barrel
Spot gold fell 0.2% to $1,910.12 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Brett Miller and Youkyung Lee.
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