Stocks fluctuate as traders wait for signs of inflation: markets close

(Bloomberg) — European stocks opened with little movement as traders braced for a week of political risks and inflation data that may help guide bets on the outlook for global interest rates.

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The Stoxx 600 index was down less than 0.1%, while US futures were little changed. Most Asian stock indices fell and an indicator of dollar strength remained stable. The Japanese yen was below 160 to the dollar when top foreign exchange official Masato Kanda said authorities are ready to step in to support it around the clock if necessary.

Investors will closely monitor the first US presidential debates scheduled for this week, while the first round of voting in the French legislative elections will take place this weekend.

Markets are at a critical juncture in positioning themselves for the second half of 2024, and the outlook for central bank interest rates from New Zealand to Japan to the United States is unclear. Inflation figures in Australia and Tokyo, as well as the Federal Reserve’s preferred gauge of consumer costs, may provide clues, but political risks loom large.

“How the U.S. dollar trades at the end of the month will be important for the direction of risk in the markets,” said Bob Savage, head of market strategy and insights at BNY Mellon in New York. Political developments from the United States to France in the coming days “will set the tone for fiscal risks.”

Later this week, the Federal Reserve’s preferred inflation benchmarks are poised to show the most moderate monthly gains since late last year, which may pave the way for officials to begin cutting interest rates. 10-year Treasury yields were steady.

U.S. stocks fell on Friday, and traders and strategists began to wonder how long this year’s rally can persist, given shifting bets on central bank rate cuts and election uncertainties in Europe.

The S&P 500 Index is likely to have posted the most gains it will see this year as investors become increasingly nervous about rich stock market valuations, according to the latest Bloomberg Markets Live Pulse survey released Monday. .

Signs of nervousness are evident, with about half of respondents saying stocks will see the start of a correction of at least 10% this year.

“The bottom line is that the current policy mix of heavy fiscal spending and tight interest rate policies is displacing many businesses and consumers in a way that is unsustainable,” Morgan Stanley strategist Michael Wilson wrote in a note. “Investors have recognized this result by rallying the few stocks of companies that are doing well in this environment.”

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In commodities, oil extended the previous session’s decline to $80 a barrel amid a stronger dollar and a technical indicator suggesting the recent rally has gone too far.

This week’s key events:

• BOJ releases June policy meeting summary of views on Monday

• Singapore CPI, Monday

• Taiwan unemployment rate and industrial production, Monday

• Argentine unemployment, GDP, Monday

• Bank of Canada Governor Tiff Macklem speaks Monday

• San Francisco Federal Reserve President Mary Daly speaks Monday

• Fed Governor Christopher Waller speaks Monday

• Australian consumer confidence, Tuesday

• Malaysia CPI, Tuesday

• Canada CPI, Tuesday

• GDP of Spain, Tuesday

• US Conference Board Consumer Confidence, Tuesday

• Federal Reserve Governor Lisa Cook and Federal Reserve Governor Michelle Bowman speak Tuesday.

• Australia CPI, Wednesday

• British Prime Minister Rishi Sunak and Labor leader Keir Starmer debate Wednesday

• The Third International Monetary Policy Conference of the Bank of Finland begins on Wednesday

• RBA Deputy Governor Andrew Hauser speaks on Thursday

• Retail sales in Japan, Thursday

• Philippine Rate Decision Thursday

• China industrial profits, Thursday

• Eurozone economic confidence, consumer confidence, Thursday

• BOE publishes financial stability report on Thursday

• Sweden interest rate decision Thursday

• Turkey Rate Decision Thursday

• US Durable Goods, Initial Jobless Claims, GDP, Wholesale Inventories, Thursday

• Unemployment in Mexico, trade and rate decision, Thursday

• Japan Tokyo CPI, unemployment, industrial production, Friday

• UK GDP, Friday

• France CPI, Friday

• Italy CPI, Friday

• Spain CPI, Friday

• GDP of the Czech Republic, Friday

• US PCE Inflation, Spending and Income, University of Michigan Consumer Sentiment, Friday

• Richmond Fed President Thomas Barkin speaks Friday

• Unemployment in Brazil, Friday

• Chilean industrial production, unemployment, Friday

• Unemployment in Colombia, decision on rates, Friday

Some of the main movements in the markets:

Stocks

• The Stoxx Europe 600 was little changed at 8:21am London time.

• S&P 500 futures little changed

• Nasdaq 100 futures little changed

• Dow Jones Industrial Average futures little changed

• The MSCI Asia Pacific index fell 0.3%

• The MSCI Emerging Markets Index fell 0.5%

Coins

• Bloomberg Dollar Spot Index Little Changed

• The euro rose 0.1% to $1.0707

• The Japanese yen barely changed at 159.70 per dollar.

• The offshore yuan was little changed at 7.2893 per dollar.

• Sterling was little changed at $1.2650.

CRYPTOCURRENCIES

• Bitcoin fell 2.4% to $62,189.8

• Ether fell 2% to $3,365.51.

Captivity

• The 10-year Treasury yield fell one basis point to 4.25%

• The 10-year German bond yield fell one basis point to 2.40%

• The UK 10-year yield fell two basis points to 4.06%

Raw Materials

• Brent crude oil was little changed

• Spot gold rose 0.1% to $2,325.18 an ounce.

This story was produced with the help of Bloomberg Automation.

–With the help of Aya Wagatsuma.

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