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U.S. stocks were set for a mixed open as the market awaits U.S. inflation data in the form of the June Consumer Price Index, while investors get ready for corporate earnings season to get under way with banking heavyweights reporting results.
In Asia, Tokyo’s
rose 0.52%, while Hong Kong’s
climbed 1.63%. The
lifted 0.53%. The
in London jumped 0.3% as the pan-European
was 0.1% lower. The
in Paris declined 0.1% and Frankfurt’s
fell 0.1%. Dow industrials futures were pointing down around 20 points, set for a mixed open after the index climbed 126 points on Monday to close at 34,996 as the
Dow,
and
set fresh records.
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Investors’ attention in the day ahead will be firmly focused on U.S. inflation data, with CPI and Core CPI—which strips out food and energy—set to give markets and central banks a new indication of how the economic recovery is having an impact on prices.
Henry Allen, a strategist at Deutsche Bank, called CPI “one of the most important data prints for markets over the last couple of months, with big implications for the Federal Reserve as well as the success of the reflation trade.”
“The last couple of releases have both surprised to the upside, which in turn prompted the Fed to shift in a hawkish direction and pencil in a couple of rate hikes for 2023,” said Allen, noting that economists at the German bank expect CPI to rise 0.54% on a month-on-month basis.
“The focus will also be on the report’s details as to whether the price pressures are coming from areas associated with the reopening and are more likely to be transitory, or whether they’re spreading to other categories that could signal a more permanent increase,” Allen said.
In April, a CPI reading vastly exceeding expectations was due, in large part, to reopening quirks and idiosyncrasies in the used-car market, Barron’s reported.
“The question of whether this will prove transitory or permanent has been one of the biggest debates in economics recently,” Allen said. “Particularly as U.S. inflation at 5.0% year-on-year is running at its fastest pace since the financial crisis, whilst core inflation of 3.8% is at its highest since 1992.”
British bank stocks got a boost after the Bank of England scrapped its Covid-19 pandemic-era restrictions on bank dividends and share buybacks, saying its stress test showed the sector was resilient enough to handle any more economic shocks from Covid-19. Shares in
HSBC,
and
jumped in London.
stock climbed near 8% in Helsinki, after the Finnish telecommunications group said it expects to revise upwards its prior guidance for 2021 when it reports quarterly earnings at the end of the month. The U.S.-listed shares in
were near 9% higher in the U.S. premarket.
Shares in meal-kit delivery group
fell 0.4%, after the German group agreed to acquire Australia’s Youfoodz in an expansion into ready-meals. The deal, for 0.93 Australian dollars per share, values
at A$125.3 million ($93.7 million) and represents a 79% premium to Youfoodz’s stock price on Monday.
The German-listed shares of
fell 2% after the group lowered its outlook. The genetic-testing company and a key supplier of coronavirus tests said that the faster-than-expected uptake of Covid-19 vaccines has weighed on demand for tests. The U.S.-listed shares of
fell 2.5% in the U.S. premarket.
On the U.S. economic front, investors can expect the small business index for June before the CPI and Core CPI readings.
In terms of U.S. corporate earnings, food and beverage company
will share the spotlight with investment banking giants
and
