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BLOOMBERG
Global stocks rose as investors awaited US inflation data that will help clarify the path for Federal Reserve policy. Europe’s Stoxx 600 index advanced 0.5%, while US equity futures showed the S&P 500 and Nasdaq 100 indexes were set to add to earlier gains. A gauge of Asian stocks rallied as Japanese equities hit a fresh three-decade high. Treasuries rose, while the dollar weakened against most of its Group-of-10 peers.
The US inflation report is top of mind for traders on Thursday. More evidence of cooling price pressures will support optimism around expectations for Fed interest-rate cuts, but a hot reading could spur volatility. Economists tracked by Bloomberg expect year-over-year core inflation to fall to 3.8% in the December data from 4% in the prior month.
“Confirmation that prices are easing will boost confidence that a May cut can be expected, and that could prompt some rally in stocks and bonds,” said Stuart Cole, chief macro economist at Equiti Capital in London. “But you need to be cognizant of the underlying CPI component. If services prices are still going in the wrong direction, then this could potentially stall any rally.” Cryptocurrency stocks extended gains in US premarket trading after the Securities and Exchange Commission for the first time approved exchange-traded funds that invest directly in Bitcoin. The largest cryptocurrency briefly scaled $47,000 in a muted climb after the green light. The largest digital currency had already jumped over 160% in the past 12 months in anticipation of the ETFs as well as looser monetary policy. In other individual stock moves, Tesco Plc climbed after Britain’s biggest retailer raised its profit guidance.