US equity futures surge as inflation fears wane

Bloomberg

American equity futures rise on Wednesday as more central-bank officials joined the chorus predicting that inflationary pressures are transitory, soothing new concerns raised by the latest US economic data.
Contracts on the S&P 500 and Nasdaq 100 signalled stocks could move higher
following a drop in US benchmarks overnight after home-sale and consumer confidence data suggested rising prices are taking a toll. Treasuries trimmed Tuesday’s rally and the dollar was steady, with attention now turning to tomorrow’s jobs data for more clues on the outlook for the economy.
The Stoxx Europe 600 index erased an advance as the banks sub-index declined amid worries about a new tax targeting Swedish lenders. Miners also dropped after China ramped up its efforts to curb commodity prices. Iron ore fell along with most industrial metals.
Signs of quickening inflation are giving investors pause for thought as they consider the outlook for the exceptional stimulus buoying markets. Still, central bankers around the globe are playing down the risk of rising prices. The question is how long the Fed and other central banks can keep stimulative monetary policy in place if economic data continue to show price pressures.
“What we keep hearing from the Fed is that they’re going to take a very different approach to inflation this time around,” Kristina Hooper, Invesco chief global market strategist, said on Bloomberg TV. “The Fed is likely to let the punchbowl stay out a lot longer. The big fear about inflation is that the Fed would act.”
Fed Vice Chair Richard Clarida said price pressures in the US would largely be transitory, though he added officials may be ready to begin discussing how to taper asset purchases in “upcoming meetings”. Bank of France Governor Francois Villeroy de Galhau talked down stimulus adjustments anytime soon, while European Central Bank Executive Board member Fabio Panetta said he sees no signs of sustained inflation that would allow for a reduction in bond purchases.
Elsewhere, oil was steady and gold erased 2021 losses. Bitcoin rallied back above the $40,000 level as cryptocurrencies recover some of the ground lost in this month’s volatile rout.
The Stoxx Europe 600 gained 0.1% as of 10:54 am London time and futures on the S&P 500 rise 0.3%.
While futures on the Nasdaq 100 climb 0.2%, futures on the Dow Jones Industrial Average also rise by as much as 0.3%.
The MSCI Asia Pacific Index surges to 0.4% and the MSCI Emerging Markets Index also rises as much as 0.4%.
The Bloomberg Dollar Spot Index was flat and the euro was little changed at $1.2246. While the Japanese yen was little changed at 108.83 per dollar, the offshore yuan rises 0.4% to 6.3847 per dollar and the British pound was little changed at $1.4152.
The yield on 10-year Treasuries was little changed at 1.56% and Germany’s 10-year yield declined three basis points to -0.19%. Britain’s 10-year yield declined two basis points to 0.77%
Brent crude rises 0.2% to $69 a barrel and spot gold also climbs 0.5% to $1,909 an ounce.