European futures slide as U.S. consumer price index eyes, Yen gains: Markets close

(Bloomberg) — European stock futures fell as traders turned their attention to U.S. inflation data expected on Tuesday for clues about the timing of future interest rate cuts by the Federal Reserve.

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The Euro Stoxx 50 contract slipped 0.5% and S&P 500 futures fell slightly. The MSCI Asia Pacific index fell for the first time in four sessions after Japanese stocks fell the most since October. The Topix index fell more than 2% as increasing speculation that the country's central bank will raise interest rates strengthened the yen and hurt exporters.

The yen hovered just below 147 against the dollar, extending last week's 2% rally against the U.S. currency – its best weekly gain since July. Amir Anvarzadeh, Strategist at Asymmetric Advisors Pte.

“The market's reaction seems to indicate that there was a lot of bet on the weak yen to continue to support multinationals, rather than on a change in corporate governance that was the catalyst for Japan's more positive portrayal,” he said.

Chinese stocks defied the gloom, with solar stocks extending recent gains as speculation that the government could ease caps on renewable energy installations boosted the sector's outlook. Stocks also rose on a report that Chinese regulators met with financial institutions to ask major banks to increase financing support for the real estate developer.

Read more: Japan's global negative interest rate experiment is nearing its end

U.S. futures fell following losses on Wall Street late last week, where both the S&P 500 and Nasdaq 100 fell. Government bonds traded stable.

The story goes on

Soft landing

Tuesday's U.S. consumer price index numbers will dominate economic data reports this week. The core price indicator is expected to have risen 0.3% month-on-month and 3.7% year-on-year in February – which would be the smallest annual increase since April 2021.

Further weakening in U.S. prices would support the disinflation narrative, which broadly remains in place despite expectations of a decline in the number of Federal Reserve rate cuts this year. Swap prices show three cuts are expected in 2024, compared to six at the start of the year.

In commodities, gold prices rose toward a record high while oil prices posted a loss ahead of reports from OPEC and the IEA this week that could provide clues about the demand outlook.

Important events this week:

• CPI reports for Argentina, Brazil, Germany, India and the US, Tuesday

• UK Jobless Claims, Unemployment, Tuesday

• Japan PPI, Tuesday

• Indian industrial production, Tuesday

• Mexico's international reserves, industrial production, Tuesday

• Philippines trading, Tuesday

• Turkish industrial production, current account, Tuesday

• The EU finance ministers will meet in Brussels on Tuesday

• ECB Council member Robert Holzmann speaks on Tuesday

• Eurozone and UK industrial production, Wednesday

• India trade, Wednesday

• Unemployment rate in South Korea, Wednesday

• Governing Council member Yannis Stournaras speaks on Wednesday

• The first deputy governor and deputy governor of Sweden's Riksbank speak on Wednesday

• Consumer price index for Saudi Arabia and Spain, Thursday

• US PPI, retail sales, initial jobless claims, business inventories, Thursday

• Australian Treasurer Jim Chalmers will address the budget on Thursday

• Housing construction in Canada begins on Friday

• Property prices in China, Friday

• France, Italy, Poland CPI, Friday

• Indonesia trading, Friday

• Japan Tertiary Index, Friday

• New Zealand PMI, Friday

• Foreign remittances from the Philippines, Friday

• GDP of Sri Lanka

• US Industrial Production, University of Michigan Consumer Sentiment, Empire Manufacturing, Friday

• Japan's largest trade union federation will announce the results of annual wage negotiations on Friday

Some of the key moves in the markets:

Shares

• S&P 500 futures were little changed at 6:40 a.m. London time

• S&P/ASX 200 futures rose 0.1%

• Hong Kong's Hang Seng rose 1.3%

• The Shanghai Composite rose 0.6%

• Euro Stoxx 50 futures fell 0.5%

• Nasdaq 100 futures fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was unchanged at $1.0939

• The Japanese yen was little changed at 146.99 per dollar

• The offshore yuan rose 0.1% to 7.1917 per dollar

• The Australian dollar fell 0.1% to $0.6615

• The British pound was little changed at $1.2852

Cryptocurrencies

• Bitcoin fell 1.2% to $68,622.38

• Ether fell 1.6% to $3,845.24

Tie up

• The yield on 10-year government bonds remained little changed at 4.07%

• Japan's 10-year yield rose three basis points to 0.760%

• Australia's 10-year yield fell two basis points to 3.95%

raw materials

This story was produced with support from Bloomberg Automation.

– With support from Winnie Hsu.

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