Markets eye US CPI and record high
A look at the day ahead in European and global markets from Tom Westbrook
Stocks near record highs and Bill Hwang and Roaring Kitty in the headlines lend this week an air of deja vu ahead of U.S. inflation data.
British labour numbers, German sentiment, U.S. producer prices, an appearance from Jerome Powell and earnings releases due through Tuesday take a back seat to Wednesday's CPI figure.
As in 2021, it's expected to begin with a 3 and markets are trying to guess whether signs of inflation picking up were a blip or a trend. A downside surprise is likely to loosen the shackles on stock rallies in Hong Kong, London and New York.
Britain's FTSE .FTSE already stands by record highs, having touched that peak only on Friday, as did Europe's STOXX 600 index .STOXX. The S&P 500 .SPX is close to topping March's record high.
The Hang Seng .HSI has added 20% in a rally that is entering a fourth week. Recent Chinese economic data show some steadiness but investors have found encouragement on the policy front.
Rumblings from the Politburo in the direction of property support, marketing plans for special bond sales and falling lending point to monetary policy reaching its limits and has fed expectations of spending to support the economy.
Currency markets were largely marking time ahead of the CPI release with the dollar trading firmly and pushing the yen to its weakest since it was swinging wildly at the start of May, when traders reckoned Japanese authorities had intervened.
GameStop GME.N and other so-called meme stocks soared Monday after flag bearer Roaring Kitty - real name Keith Gill - posted on X.com for the first time in three years, in perhaps a hint at the froth that could be unleashed if CPI undershoots.
Key developments that could influence markets on Tuesday:
Economics: German ZEW surveys, British wages, U.S. PPI
Earnings: Bayer, Veolia, Vodafone, Alibaba
Speeches: Fed's Powell, BoE's Pill
US CPI gains expected to have slowed in April https://reut.rs/4a4HTA0
Reporting by Tom Westbrook; Editing by Jacqueline Wong
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
