Stock markets steadied and the dollar was little changed as investors looked ahead to key US inflation data and Apple Inc.’s new product lineup.
(Bloomberg) — Stock markets steadied and the dollar was little changed as investors looked ahead to key US inflation data and Apple Inc.’s new product lineup.
Europe’s Stoxx 600 edged up 0.2% while US futures on the S&P 500 futures were little changed. Apple is looking to snap several straight quarters of sluggish sales — its longest slump in two decades — and get consumers excited about upgrading again with new features.
In Europe, UK wage growth held at a record high in the three months through July, a sign of persistent inflation that will keep pressure on the Bank of England to raise interest rates again. Germany’s economic recovery is in spotlight as well with the release of the ZEW survey, with sentiment likely weighed down by tighter monetary conditions. US inflation data are due Wednesday and the European Central Bank holds its interest-rate decision on Thursday.
“Markets are gearing up to this week’s main events,” wrote ING Group NV strategists including Benjamin Schroeder. “It is not just about this Thursday’s ECB meeting, but also about crucial data in the US and UK ahead of next week’s respective central bank meetings.”
Stocks in Asia fluctuated and Chinese shares were back in the red. Gains triggered by news on Country Garden Holdings Co. — which secured payment extension approval from its bondholders — were not enough to keep the positive sentiment going for long.
In currencies, the yen fell and the greenback steadied after falling by the most in two months. The yuan was little changed after China’s central bank set its daily fixing rate at below 7.20 versus the dollar, another sign that it won’t tolerate excessive yuan weakness.
The Japanese government saw a solid demand during the auction of its five-year bond Tuesday, with a higher-than-expected cut-off price. The sale was the first since central bank Governor Kazuo Ueda jolted markets with comments on the negative interest rate policy. Yield on the five-year note fell to 0.27% from a day’s high of 0.290% after the auction, while that of the 10-year benchmark bond was up slightly to 0.71%.
In the US, consumers’ inflation expectations were mostly stable in August, but households grew more concerned about their finances and more pessimistic about the job market, according to a Fed Bank of New York survey.
The consumer-price index report Wednesday will provide the latest insight into how much further the Fed may need to go to pull inflation back toward its target. Monthly inflation is expected to accelerate to 0.6% in August, while core is seen stable at 0.2%, according to economists’ estimates.
“If we do see potentially a more sticky inflation number than the 0.6% expected by economists or 0.2% on core, I would expect to see the bond market start to potentially price in another rate hike before the end of the year, potentially as early as November,” Anthony Doyle, head of investment strategy at Firetrail Investments Pty Ltd, said on Bloomberg Television.
Meanwhile, some 26% of respondents in the latest MLIV Pulse survey say they plan to decrease their exposure to the S&P 500 over the next month. That’s double the amount of those who plan to buy. Only 13% of respondents said they might increase exposure.
In commodities, oil edged up, trading near the highest level this year before reports that may offer further insight into the market’s balances. Gold was little changed.
Key events this week:
- Germany ZEW survey expectations, Tuesday
- UK jobless claims, unemployment, Tuesday
- Apple set to unveil iPhone 15 line and next-generation smartwatches at “Wonderlust,” its biggest product-upgrade event of the year, Tuesday
- Japan PPI, Wednesday
- Eurozone industrial production, Wednesday
- UK industrial production, Wednesday
- US CPI, Wednesday
- Tech leaders including Tesla’s Elon Musk and Meta Platforms’ Mark Zuckerberg are set to attend a forum on the future of AI convened by Senator Chuck Schumer, Wednesday
- Japan industrial production, Thursday
- European Central Bank policy meeting and news conference by President Christine Lagarde, Thursday
- US retail sales, PPI, business inventories, initial jobless claims, Thursday
- China property prices, retail sales, industrial production, Friday
- US industrial production, University of Michigan consumer sentiment, Empire Manufacturing index, Friday
Some of the main moves in markets:
- The Stoxx Europe 600 rose 0.2% as of 8:05 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures were little changed
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index rose 0.2%
- The MSCI Emerging Markets Index was little changed
- The Bloomberg Dollar Spot Index was little changed
- The euro fell 0.2% to $1.0732
- The Japanese yen fell 0.2% to 146.83 per dollar
- The offshore yuan was little changed at 7.3070 per dollar
- The British pound was little changed at $1.2511
- Bitcoin rose 2.8% to $25,793.73
- Ether rose 2.5% to $1,580.66
- The yield on 10-year Treasuries was little changed at 4.29%
- Germany’s 10-year yield was little changed at 2.63%
- Britain’s 10-year yield was little changed at 4.47%
- Brent crude rose 0.2% to $90.79 a barrel
- Spot gold fell 0.1% to $1,919.72 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott and Masaki Kondo.
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