Stocks rise as markets await US inflation report

Global stocks and bonds edged higher ahead on speculation that a crucial U.S. inflation report will show that price pressures slowed last month, cementing the view that interest rates have peaked. 

Europe’s Stoxx 600 index added 0.2%, with mining stocks led by a 4% gain in Glencore Plc after it agreed to buy a majority stake in Teck Resources Ltd.’s coal business for almost $7 billion. Vodafone Group Plc fell 1.7% after reporting weaker profits in southern Europe. 

Equity futures also rose, with contracts on Nasdaq 100 advancing 0.3%. Treasury yields slipped two basis points to 4.61%. West Texas Intermediate futures climbed. 

U.S. inflation probably eased to an annual rate of 3.3% in October from 3.7% in September, according to a Bloomberg survey of economists. However, core inflation which strips out energy and food costs, is predicted to be unchanged, implying slow progress toward the Federal Reserve’s 2% inflation target. 

Michael Preiss, a portfolio manager at Das Family Office Pte Ltd., expects the figures will show sticky inflation, but added that “signaling from the Fed increasingly leads us to the belief that we are at the end of the tightening cycle.”

“Our base case is no rate cuts and no recession, which potentially means a year-end rally in global risk assets, especially equities,” Preiss said on Bloomberg Television. 

Fed Vice Chair Philip Jefferson and Chicago Fed President Austan Goolsbee will also speak later in the day, and Home Depot Inc. reports earnings. 

Traders are also watching to see how the US inflation data impacts the yen. Some analysts have said a stronger-than-expected print may push the Japanese currency to a 33-year low and potentially trigger an intervention by the central bank. 

Japanese Finance Minister Shunichi Suzuki has warned repeatedly this week that the government will respond to excessive moves. The currency traded around 151.7 per dollar, close to falling past the 151.95 threshold. 

Elsewhere in currency markets, the pound rose 0.2% in response to data showing UK labor markets is holding up well. 

Earlier, MSCI’s Asia Pacific equity index advanced 0.3%. Chinese President Xi Jinping and his US counterpart Joe Biden are due to meet Wednesday on the sidelines of the Asia-Pacific Economic Cooperation summit in San Francisco.

KEY EVENTS THIS WEEK

• US CPI, Tuesday
• Home Depot earnings, Tuesday
• Fed Vice Chair Philip Jefferson, SNB President Thomas Jordan and ECB chief economist Philip Lane speak during conference in Zurich, Tuesday-Wednesday
• Chicago Fed President Austan Goolsbee speaks, Tuesday
• Bank of England chief economist Huw Pill speak during event, Tuesday
• China retail sales, industrial production, fixed-asset investment, Wednesday
• Japan GDP, industrial production, Wednesday
• UK CPI, Wednesday
• US retail sales, business inventories, PPI, Empire manufacturing, Wednesday
• Target earnings, Wednesday
• China new home prices, Thursday
• US initial jobless claims, industrial production, Thursday
• Walmart earnings, Thursday
• US President Joe Biden and Chinese President Xi Jinping expected to speak at APEC leaders summit, Thursday
• Cleveland Fed President Loretta Mester, New York Fed President John Williams and Fed vice chair for supervision Michael Barr speak, Thursday
• Bank of England deputy governor Dave Ramsden and ECB President Christine Lagarde speak at event, Thursday
• US housing starts, Friday
• US Congress faces a midnight deadline to pass a federal spending measure, Friday
• ECB President Christine Lagarde speaks, Friday
• Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins and San Francisco Fed President Mary Daly speak, Friday

Some of the main moves in markets include:

STOCKS

• The Stoxx Europe 600 rose 0.2% as of 10:01 a.m. London time
• S&P 500 futures rose 0.1%
• Nasdaq 100 futures rose 0.2%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index rose 0.3%
• The MSCI Emerging Markets Index rose 0.2%

CURRENCIES

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.2% to $1.0718
• The Japanese yen was little changed at 151.69 per dollar
• The offshore yuan was little changed at 7.2988 per dollar
• The British pound rose 0.2% to $1.2303

CRYPTOCURRENCIES

• Bitcoin was little changed at $36,486.25
• Ether fell 0.7% to $2,046.47

BONDS

• The yield on 10-year Treasuries declined two basis points to 4.62%
• Germany’s 10-year yield declined one basis point to 2.70%
• Britain’s 10-year yield declined one basis point to 4.30%

COMMODITIES

• Brent crude fell 0.3% to $82.47 a barrel
• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.