Stocks Steady With Traders on Sidelines Before CPI: Markets Wrap

(Bloomberg) — European stocks ticked higher while US stock futures steadied as markets head into a crunch period, with key inflation data in the US on Wednesday followed by interest-rate decisions on both sides of the Atlantic.

Most Read from Bloomberg

Contracts on the S&P 500 traded little changed after the underlying gauge rose 1.2% on Monday, rebounding from its worst start to the month in data going back to 1953. Benchmark Treasury yields rose a second day, while the dollar held Monday’s gains.

The market mood is cautious as investors look to balance US recession fears and the likelihood of a soft landing, amid worries the Fed may be falling behind the curve as the labor market cools. Meanwhile, US political risk is back at the forefront, with former President Donald Trump squaring off in a debate with US Vice President Kamala Harris later Tuesday.

Hedge funds have been unwinding their positions to get cash ready for volatility ahead of the Nov. 5 vote, according to Goldman Sachs Group Inc. data.

The European Central Bank’s policy meeting later in the week is also weighing on risk appetite. The central bank meets Thursday, where it is expected to deliver a second interest rate cut this year to tackle a faltering economy.

Morgan Stanley sees the euro sliding toward parity with the dollar within months, as the ECB dials up policy easing. The US bank expects the single currency to slump to $1.02 by year-end, a roughly 7% depreciation from its current level of $1.1037.

The call is the most bearish among currency analysts surveyed by Bloomberg, with the consensus anticipating the euro will actually rise to end the year at $1.11. The view rests on the central bank pressing ahead with interest-rate cuts at its next three meetings, along with the potential for a jumbo half-point move.

Key events this week:

• Germany CPI, Tuesday

• US presidential debate between Donald Trump and Kamala Harris, Tuesday

• US CPI, Wednesday

• Japan PPI, Thursday

• ECB rate decision, Thursday

• US initial jobless claims, PPI, Thursday

• Eurozone industrial production, Friday

• Japan industrial production, Friday

• U. Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 9:28 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures fell 0.1%

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index fell 0.2%

• The MSCI Emerging Markets Index was little changed

Story continues

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1037

• The Japanese yen fell 0.3% to 143.68 per dollar

• The offshore yuan fell 0.2% to 7.1316 per dollar

• The British pound was little changed at $1.3085

Cryptocurrencies

• Bitcoin rose 0.4% to $57,245.75

• Ether rose 0.7% to $2,358.14

Bonds

• The yield on 10-year Treasuries advanced two basis points to 3.72%

• Germany’s 10-year yield advanced one basis point to 2.18%

• Britain’s 10-year yield advanced two basis points to 3.87%

Commodities

• Brent crude fell 0.4% to $71.56 a barrel

• Spot gold fell 0.2% to $2,502.02 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Jason Scott and Michael Msika.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.