US equity futures wavered as speculation that central banks are likely to stay hawkish for the coming months weighed on gains. German government bonds extended declines on hotter-than-expected inflation data.
(Bloomberg) — US equity futures wavered as speculation that central banks are likely to stay hawkish for the coming months weighed on gains. German government bonds extended declines on hotter-than-expected inflation data.
S&P 500 futures fluctuated, after briefly posting modest gains as a slew of data showed that China’s economy is on track for a stronger recovery. The Stoxx Europe 600 Index bounced 0.2%.
Among individual US premarket stock movers, Novavax Inc. plummeted after the Covid-19 vaccine maker warned over substantial doubt over its ability to stay in business and Rivian Automotive Inc. slumped on supply-chain snags.
Bonds in Europe fell as evidence mounted that central banks will need to do more to arrest rampant inflation, a theme that has dominated trading in recent weeks as the peak of rates is recalibrated on both sides of the Atlantic.
The latest data showed an unexpected acceleration in German inflation in February, further complicating the European Central Bank’s task after overshoots this week in other parts of the continent.
Consumer prices advanced 9.3% from a year ago, up from January’s 9.2% gain. Analysts in a Bloomberg survey had expected a slowdown to 9%.
A 4% ECB terminal rate is now fully priced with rates forecast to rise through February 2024. Bond traders also assign lower odds of a Fed rate cut this year, a shift from what they were expecting just a month ago.
“February has poured cold water on hopes that policy makers may quickly tame inflation toward target,” Generali Investments strategists wrote in their monthly outlook. “We now have even higher peak rates in our books.”
Key events this week:
- Eurozone S&P Global Eurozone Manufacturing PMI, Wednesday
- US construction spending, ISM Manufacturing, light vehicle sales, Wednesday
- Eurozone CPI, unemployment, Thursday
- US initial jobless claims, Thursday
- Eurozone S&P Global Eurozone Services PMI, PPI, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 8:32 a.m. New York time
- Nasdaq 100 futures were little changed
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 rose 0.2%
- The MSCI World index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.5%
- The euro rose 0.9% to $1.0673
- The British pound was little changed at $1.2034
- The Japanese yen rose 0.3% to 135.74 per dollar
Cryptocurrencies
- Bitcoin rose 2.2% to $23,649.71
- Ether rose 2.7% to $1,649
Bonds
- The yield on 10-year Treasuries advanced three basis points to 3.95%
- Germany’s 10-year yield advanced six basis points to 2.71%
- Britain’s 10-year yield declined one basis point to 3.81%
Commodities
- West Texas Intermediate crude fell 0.8% to $76.44 a barrel
- Gold futures rose 0.4% to $1,844.30 an ounce
This story was produced with the assistance of Bloomberg Automation.
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