(Bloomberg) — U.S. stock futures point to a slightly weaker start for Wall Street after two weeks of strong gains as investors awaited inflation data that could show whether the Federal Reserve is finished raising interest rates.
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Contracts for the S&P 500 and Nasdaq 100 fell about 0.3% after the underlying indexes closed sharply higher on Friday. Shares of Boeing Co. rose nearly 4% thanks to a $52 billion deal with Emirates and news that China is considering an end to a freeze on purchases of Boeing planes.
Europe’s Stoxx 600 index rose 0.5%, driven by a rally in healthcare stocks. Denmark’s Novo Nordisk A/S rose more than 4% after a study supported the use of Wegovy, its blockbuster weight-loss drug, to reduce heart attacks and deaths in obesity patients. The news also benefited U.S.-listed competitor Eli Lilly & Co., which has its own weight-loss drugs.
The market’s attention is firmly on Tuesday’s U.S. consumer price data, which is expected to show inflation falling to an annual rate of 3.3% in October, down from 3.7% the previous month. Ten-year Treasury yields fell two basis points to 4.63%, taking them down about 30 basis points this month.
While several Fed officials have dismissed the likelihood of rapid rate cuts, money markets and economists are sticking with their bet on policy easing. Morgan Stanley predicted deep interest rate cuts starting in June, while Goldman Sachs forecast the first cut around the end of 2024.
“If we get inflation in line with consensus that’s good news, but I don’t think the data will change the tone we’re hearing from Fed officials pushing back against market excitement over rate cuts,” said Rabobank strategist Jane Foley.
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She predicted that central banks would “take more restrictive measures to control the extent of market price declines.”
Meanwhile, further signs of a thawing in US-China relations are emerging, with Joe Biden and Xi Jinping due to meet on Wednesday. The White House has called resuming military communications between the US and China a priority. Chinese stocks listed in Hong Kong rose 1.3%.
In foreign exchange markets, the yen fell to a new low against the dollar in 2023, raising concerns that authorities will intervene to support the currency.
The pound rose for a second day and 10-year Treasury yields also fell, with UK inflation figures expected to show slowing price growth on Wednesday.
Brent crude futures remained near $81 after losing about 12% over the past three weeks. Bitcoin hovered around $37,000 – around its highest price in 18 months.
Events coming this week:
ECB Vice President Luis de Guindos speaks on Monday
US CPI, Tuesday
UK jobless claims, Tuesday
Chicago Fed President Austan Goolsbee speaks Tuesday
China retail sales, Wednesday
UK CPI, Wednesday
US retail sales, PPI, Wednesday
Prices for new houses in China, Thursday
Initial jobless claims in the US, Thursday
New York Fed President John Williams, Thursday
US housing construction begins on Friday
ECB President Christine Lagarde speaks on Friday
Speaking on Friday are Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins and San Francisco Fed President Mary Daly
Some of the key moves in the markets:
Shares
The Stoxx Europe 600 rose 0.6% at 12:11 p.m. London time
S&P 500 futures fell 0.2%
Nasdaq 100 futures fell 0.3%
The futures on the Dow Jones Industrial Average hardly changed
The MSCI Asia Pacific index rose 0.3%
The MSCI Emerging Markets Index rose 0.5%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0678
The Japanese yen fell 0.2% to 151.77 per dollar
The offshore yuan rose 0.1% to 7.2986 per dollar
The British pound rose 0.1% to $1.2241
Cryptocurrencies
Bitcoin fell 1.1% to $36,768.94
Ether fell 0.7% to $2,046.09
Tie up
The 10-year Treasury yield fell one basis point to 4.64%
The yield on 10-year German government bonds fell by two basis points to 2.70%
The 10-year UK government bond yield fell two basis points to 4.31%
raw materials
Brent crude rose 0.1% to $81.52 a barrel
Spot gold fell 0.2% to $1,937.14 an ounce
This story was produced with support from Bloomberg Automation.
– With support from Pearl Liu and John Viljoen.
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