Stocks advance, US futures becalmed before CPI data

Bloomberg

European stocks advanced and Wall Street futures were steady as traders braced for a report that may show US inflation is cooling, reducing pressure for aggressive rate hikes from the Federal Reserve.
The benchmark European stocks gauge advanced 0.5%, boosted by a second day of gains for real estate stocks amid hopes of an easier outlook for rates. On Wall Street, Nasdaq 100 contracts slipped 0.1% after the technology sector, one of the most-beaten down groups during the Fed’s tightening campaign, led gains among US shares on January 11. Those for the S&P 500 were little changed.
Tesla Inc shares were lower in New York premarket trading after a report that an expansion to the US-based electric carmaker’s Shanghai plant has been delayed.
Treasuries steadied, following gains in the session, while a gauge of dollar strength edged lower as investors looked beyond the drumbeat of hawkish comments from the Federal
Reserve officials.
Every aspect of the CPI report will be scrutinised, with extra attention on core inflation, which excludes food and energy and is seen as a better indicator than the headline measure. The projected 5.7% increase would be well above the Federal Reserve’s goal, helping explain its intention of keeping rates higher for longer. But the year-over-year price growth would also show moderation.
“Given recent developments in the oil markets and with food price growth abating, investors will look to the core reading to get a better insight into underlying price pressures, which could remain quite sticky,” economists at Rand Merchant Bank in Johannesburg said in a note.
In Asia, an index of the region’s shares climbed for a ninth time in 10 days as it headed for the highest level in about five months. The yen rallied on a report that the Bank of Japan (BOJ) will look into the side effects of its ultra-loose monetary policy. Japanese government bond futures slid to the lowest since 2014 and the yield on the nation’s benchmark 10-year debt sat hard against the BOJ’s 0.5% ceiling.
Inflation data for China showed factory-gate prices falling more than expected in December and consumer prices ticking up as the end of Covid Zero snarled manufacturing
operations but eliminated mobility curbs on people. The offshore yuan fluctuated while remaining near Wednesday’s closing level.
Elsewhere in markets, oil rose for a sixth day on hopes US inflation is cooling and as China’s crude buying ramps up before the Lunar New Year holidays. Gold climbed ahead of the data, which may determine whether its two-month uptrend continues.
Bitcoin gained for a ninth day, the longest winning streak for the world’s largest crypto token since 2020.
The Stoxx Europe 600 rose 0.5% as of 10:31 am London time and S&P 500 futures were little changed.
While Nasdaq 100 futures fell 0.1%, futures on the Dow Jones Industrial Average were little changed and the MSCI Asia Pacific Index rose 0.7%. The MSCI Emerging Markets Index was little changed.
The Bloomberg Dollar Spot Index fell 0.2% and the euro was unchanged at $1.0757.
While the Japanese yen rose 1% to 131.06 per dollar, the offshore yuan rose 0.1% to 6.7585 per dollar and the British pound was little changed at $1.2155.