(Bloomberg) — European equity futures edged higher after the S&P 500 closed at a new record high Friday amid optimism over eventual Federal Reserve interest-rate cuts. Trading in Asia was muted with a swath of markets shut for Lunar New Year.
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Contracts for the Euro Stoxx 50 show the benchmark is poised to extend its advance after finishing Friday with a third weekly gain. The S&P 500 closed above 5,000 for the first time amid a renewed rally in big tech companies.
Equities in Australia, New Zealand, India and the Philippines drifted lower amid a lack of leads in the region. Japan, China, Hong Kong, Singapore, Taiwan, South Korea, Malaysia and Vietnam were all shut for holidays.
US futures were little changed with investors preparing for US inflation numbers due Tuesday that will help identify the path forward for the Fed.
Australian and New Zealand bonds fell, roughly mirroring declines in Treasuries on Friday that added two basis points to the 10-year yield. Trading of cash Treasuries is closed in Asia due to the holiday in Japan.
The yen held near a two-month low reached on Friday following comments from central bankers that the Bank of Japan will take its time raising rates. Japan’s currency has weakened against all its Group-of-10 peers this year.
Bitcoin was little changed after earlier edging up toward $49,000 — a level last seen in mid-January when a number of US spot exchange-traded funds began trading.
The annual US inflation rate is forecast to have dropped to 2.9% in January from 3.4% the prior month, according to consensus estimates of economists surveyed by Bloomberg. That would be the first reading below 3% since March 2021.
“High inflation rarely has been tamed without precipitating a recession,” Ed Yardeni, president of Yardeni Research Inc., wrote in a research note. “The Fed has steered inflation down toward its 2% target, while allowing the US economy to fly, avoiding a hard landing.”
The S&P 500 rose 0.6% on Friday to set a fresh record, while the Nasdaq 100 jumped 1%. The gains were helped by technology stocks and positive fourth-quarter earnings. Four in five of the companies that have reported their results so far have exceeded expectations, brightening the outlook for corporate profits.
The advance for US stocks came even as traders pushed back expectations for Fed policy easing after relatively hawkish commentary from central bankers and economic data showing no immediate need to trim interest rates.
Swaps market pricing shows investors anticipate the chance of a Fed cut in March at 15%, down from 65% a month ago. Traders now foresee four 25-basis-point rate cuts in 2024, down from seven forecast at the end of last year.
In commodities, oil prices fell for the first time in six days after Iran’s foreign minister said the war in Gaza may be nearer to a “diplomatic solution.”
In Asia, data set for release Monday include inflation and industrial output reports for India.
Key events this week:
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India CPI, Monday
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Minneapolis Fed President Neel Kashkari, Fed Governor Michelle Bowman, Fed President Tom Barkin speak, Monday
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ECB executive board member Piero Cipollone, chief economist Philip Lane speak, Monday
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US CPI, Tuesday
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UK unemployment, Tuesday
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Japan producer prices, Tuesday
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UK inflation, Wednesday
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Eurozone GDP, industrial production, Wednesday
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Indonesia presidential election, Wednesday
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Bank of England Governor Andrew Bailey speaks, Wednesday
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ECB governing council member Boris Vujcic and vice president Luis de Guindos speak
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Chicago Fed President Austan Goolsbee speaks, Wednesday
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Australia jobs, Thursday
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Japan GDP, Thursday
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UK GDP, Thursday
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US initial jobless claims, retail sales, Thursday
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Philippine central bank meeting on interest rates, Thursday
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ECB President Christine Lagarde speaks, Thursday
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Fed Governor Christopher Waller speaks, Thursday
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Bank of England policy makers Catherine Mann, Megan Green speak, Thursday
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US housing starts, producer prices, Friday
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San Francisco Fed President Mary Daly, Fed Vice Chair for Supervision Michael Barr speak, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 2:51 p.m. Tokyo time
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Nasdaq 100 futures fell 0.1%
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S&P/ASX 200 fell 0.4%
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Euro Stoxx 50 futures rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0791
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The Japanese yen was little changed at 149.20 per dollar
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The offshore yuan was little changed at 7.2243 per dollar
Cryptocurrencies
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Bitcoin was little changed at $48,126.2
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Ether fell 0.3% to $2,496.89
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
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