Stocks, futures mixed before US inflation data

Bloomberg

American equity futures edged higher on Wednesday while stocks in Europe dipped in cautious trading dominated by a dimming economic outlook and an anxious wait for data that may show US inflation at a fresh four-decade high.
S&P 500 and Nasdaq 100 futures posted modest gains after yet another volatile day that ended with both gauges solidly in the red. Carmakers and insurers led a decline in the Stoxx Europe 600 index. The UK benchmark underperformed after Bank of England Governor Andrew Bailey said policy makers are prepared to move borrowing costs higher in bigger steps to control inflation. MSCI Inc.’s Asia-Pacific share gauge added less than 0.5%, bolstered by a rebound in Chinese technology shares.
Treasuries were steady and a key part of the yield curve remains inverted, a potential signal of recession ahead. The 10-year yield at one point Tuesday was 12.4 basis points below the 2-year rate, a level unseen since 2007. Most
European bonds fall.
Brent crude oil stabilised at about $100 a barrel after a tumble. The dollar hovered near the highest levels
since March 2020. The euro remained in sight of parity
with the greenback. Bitcoin hovered above $19,000.
Rapidly tightening monetary policy in the US and elsewhere to fight price pressures is fuelling worries about growth and leaving markets nervous. South Korea and New Zealand became the latest to hike interest rates further.
Economists project US inflation likely hit a pandemic peak in June that will keep the Federal Reserve geared for another big rate increase. The consumer-price index probably rose 8.8% from a year earlier, the largest jump since 1981, according to a Bloomberg survey.
“This is widely expected to be a really strong print,” Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said on Bloomberg Television. “Even if it is not, I don’t think that changes the Fed’s perspective in a couple of weeks. We won’t have enough evidence that inflation is convincingly turning over.”
The International Monetary Fund cut its growth projections for the US economy and warned that a broad-based surge in inflation poses “systemic risks” to both country and the global economy.
Traders are also on tenterhooks for the latest corporate earnings getting underway this week and monitoring for a brewing energy crisis in Europe if Russia cuts off gas supplies in the fallout from its invasion of Ukraine.