European stocks open modestly higher ahead of US inflation data
Global stock markets started the week with a slight gain as investors hoped for upcoming economic data in hopes of easing pressure on the US central bank to continue raising interest rates.
The European Stox 600 across the region rose 0.2% on Monday, nearing a one-year high. His FTSE 100 in London rose his 0.3%, close to last week’s high. Germany’s Dax rose 0.4%.
Contracts tracking Wall Street blue chip S&P 500 and tech-heavy Nasdaq 100 were flat ahead of the New York opening.we stock last week recorded its biggest five-day drop in two months.
The move comes ahead of a significant series of U.S. inflation on Tuesday, with consumer prices expected to rise 6.2% in January from 6.5% the previous month, according to economist forecasts compiled by Bloomberg. This would represent the smallest drop in annual inflation since September.
But Francesco Pesore, foreign exchange strategist at ING, said such numbers would encourage Fed officials who want more aggressive rate hikes. That makes it more likely that interest rates will rise by a quarter of a percentage point in May. Investors expect a move of the same magnitude at the US Central Bank’s next meeting in March.
“January U.S. data should be strong throughout, largely thanks to much improved weather conditions compared to December,” said Pesole. A significant increase in the number of jobs available also suggests an increase in demand.”
US stocks have fallen and Treasury yields have risen since early February data showed the US added more than 500,000 jobs in the first month of the year, which was expected. about three times as many as before. After a confident start to 2023, “investor positioning has become distinctly bearish,” said JP Morgan analysts.
Yields on two-year government bonds rose 0.02 points to 4.53% on Monday, the highest since the end of November. The 10-year government bond yield fell 0.05 points to 3.73%.
A measure of dollar strength against a basket of six peers rose 0.1%. The yen fell 0.7% against the US dollar to 132.38 as investors digested the news that scholar Kazuo Ueda would be nominated as the next governor of the Bank of Japan.
International oil benchmark Brent crude fell 1% to $85.53 a barrel, while US marker West Texas Intermediate fell 1.2% to trade at $78.81.
In Asia, Hong Kong’s Hang Seng Index fell 0.1%, Japan’s TOPIX fell 0.5% and South Korea’s Kospi fell 0.7%. China’s CSI 300 rose his 0.9%.
https://www.ft.com/content/392b76e7-7a4f-4afa-ac63-9655043150bd European stocks open modestly higher ahead of US inflation data