European Futures Rise Ahead of US Inflation Data: Markets Wrap

(Bloomberg) — European stocks posted gains that were more modest than those in Asian markets, where the tech sector led a risk-on rally before key US inflation data that’s predicted to signal easing price pressures.

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Europe’s Stoxx 600 advanced 0.2%, with technology-sector shares including SOITEC and Dassault Systemes SE contributing most to the advance. US stock futures were steady, while the dollar fell against most major currencies ahead of an inflation print that may boost the chances of Federal Reserve interest-rate cuts. US Treasuries posted small moves.

Traders are awaiting the core CPI reading, which is expected to rise 0.2% in June for a second month. That would mark the smallest back-to-back gains since August — a pace seen as palatable for Fed officials. Swaps are pricing in two Fed cuts in 2024, with a strong chance of the first coming in September.

“June’s CPI report looks to be another ‘very good’ report that should boost the FOMC’s confidence about the inflation trajectory,” said Anna Wong at Bloomberg Economics. “That should set the stage for the Fed to start cutting rates in September.”

In Asia, Taiwan Semiconductor Manufacturing Co. traded at record levels after the sole supplier of the most-advanced chips for Nvidia Corp. and Apple Inc. said second-quarter sales grew the fastest since 2022. Sony Group Corp., Tencent Holdings Ltd. and Korean chipmaker SK Hynix Inc., which traded at its highest levels since 2000, were among top contributors to the climb in the regional stock index.

The S&P 500 and Nasdaq 100 each gained more than 1% overnight to set fresh all-time highs, spurred by the likes of Nvidia and Apple. The iPhone maker said it aims to ship 10% more new devices after a bumpy 2023. The S&P 500 has advanced in each of the past seven sessions, its longest winning streak since November. MSCI Inc.’s global stocks index is at a record high.

Meanwhile, Jerome Powell told Congress that the Fed doesn’t need inflation below 2% before cutting rates and that officials still have more work to do. He noted the labor market has cooled “pretty significantly.”

Oil climbed for a second day as signs of growing demand and a risk-on tone across broader markets combined to aid sentiment. Gold advanced for a third day.

Story continues

Key events this week:

• US CPI, initial jobless claims, Thursday

• Fed’s Raphael Bostic and Alberto Musalem speak, Thursday

• China trade, Friday

• University of Michigan consumer sentiment, US PPI, Friday

• Citigroup, JPMorgan and Wells Fargo’s earnings, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 8:13 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 rose 1%

• The MSCI Emerging Markets Index rose 1%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0834

• The Japanese yen was little changed at 161.72 per dollar

• The offshore yuan was little changed at 7.2871 per dollar

• The British pound rose 0.1% to $1.2862

Cryptocurrencies

• Bitcoin rose 1% to $57,988.51

• Ether rose 0.3% to $3,104.65

Bonds

• The yield on 10-year Treasuries was little changed at 4.29%

• Germany’s 10-year yield was little changed at 2.54%

• Britain’s 10-year yield advanced one basis point to 4.14%

Commodities

• Brent crude rose 0.6% to $85.59 a barrel

• Spot gold rose 0.4% to $2,380.41 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Richard Henderson.

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