U.S. futures fluctuate as traders pin their hopes on the Fed.Disney Drops: Market Wrap

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(Bloomberg) — U.S. stock futures fell and European stocks rose as more investors said the U.S. Federal Reserve was likely to pause interest rate hikes as inflation data cooled.

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The S&P 500 and Nasdaq 100 contracts were largely unchanged. U.S. stocks fell in premarket trading after Walt Disney expected wider losses for its streaming service this quarter. Robinhood Markets rose after the trading platform’s better-than-expected performance. Travel and personal care stocks led the gains in European stocks.

The pound fell slightly after the Bank of England raised its base lending rate to its highest level since 2008 and said further rate hikes may be needed if inflationary pressures persist. The BOE also made the biggest upward revision to UK growth forecasts since independence in 1997.

Investor attention will turn to the next release of US jobless claims and producer price data for the latest snapshot of economic conditions. Data released on Wednesday showed signs that U.S. inflation is slowing after a year of Fed rate hikes and recent credit stress. However, overall prices are still rising at a fast pace and the job market remains strong.

“It’s definitely optimistic to think about a rate cut, but not so optimistic to think about a rate cut,” Sunaina Sinha Haldea, global head of private capital advisory at Raymond James, told Bloomberg Television. . “This printout gives the Fed what it needs to consider a moratorium,” she said.

Industrial metal prices fell as data from China raised concerns about demand in the world’s second-largest economy. Consumer inflation fell to near zero in April, but producer prices plunged further into deflation, according to Beijing’s National Bureau of Statistics. The People’s Bank of China (PBOC) said April’s credit and new loans fell from the previous month and fell short of economists’ expectations.

Iron ore fell below $100 a ton while copper hit its lowest level since January. In other commodities markets, oil prices rose in the fourth of five trades as traders assessed supply disruptions.

The Bloomberg Dollar Spot Index bounced back from Wednesday’s decline. Yields on 10-year government bonds fell two basis points.

European Central Bank officials have not ruled out the possibility that the ECB will continue to raise interest rates beyond the summer as investors assess the direction of Britain’s monetary policy.

“Inflation is still very persistent,” ECB Governing Council member Joachim Nagel said Thursday in Niigata, Japan, where he attended the meeting of G7 finance ministers. He described rising prices as a “very persistent phenomenon.”

Meanwhile, an ECB survey released on Thursday found consumer expectations for eurozone inflation rose “significantly” in March, with forecasts for the next 12 months rising to 5% from 4.6% in February. It has been shown.

The possibility of a first-ever U.S. debt default remains a living question for investors. Treasury Secretary Janet Yellen, who met with finance ministers from the seven major nations at a meeting in Japan, said such an event would undermine the country’s global leadership. Talks between President Joe Biden and Congressional Republicans have made little progress. The president and House Speaker Kevin McCarthy are scheduled to meet again on Friday.

Some of the illiquid swaps that guarantee Credit Suisse Group AG’s debt have revived as some hedge funds argue they should be activated. Funds from ForsixThree Capital and Diameter Capital Partners this week are among the biggest gainers since UBS Group AG agreed to buy Credit Suisse in March, according to people familiar with the matter. rice field.

The Derivatives Committee, tasked with overseeing the market, has been asked to determine whether write-downs on banks’ riskiest liabilities qualify for insurance payments.

This week’s main events:

  • UK BOE Interest Rate Decision, Industrial Production, GDP, Thursday

  • US PPI, initial jobless claims, Thursday

  • G7 finance ministers and central bank governors meet in Japan on Thursday

  • University of Michigan Consumer Sentiment Friday

  • Fed President Philip Jefferson and St. Louis Fed President James Bullard will join a panel on monetary policy at Stanford University on Friday.

The main movements in the market are:

stock

  • S&P 500 Futures Little Changed as of 7:11 a.m. New York Time

  • Nasdaq 100 futures up 0.1%

  • Dow Jones Industrial Average futures down 0.2%

  • Stoxx European 600 up 0.3%

  • MSCI World Index Little Change

currency

  • Bloomberg Dollar Spot Index gains 0.3%

  • The euro fell 0.5% to $1.0929.

  • The British pound fell 0.2% to $1.2604.

  • The Japanese yen is almost unchanged at 134.28 yen per dollar.

Cryptocurrency

  • Bitcoin dropped 1.5% to $27,470.45.

  • Ether fell 1.8% to $1,824.34.

bond

  • The 10-year Treasury yield fell four basis points to 3.40%.

  • German 10-year bond yields fell 5 basis points to 2.24%.

  • UK 10-year yields fell four basis points to 3.76%.

merchandise

This article was produced in partnership with Bloomberg Automation.

–With contributions from Allegra Catelli, Brett Miller, and Richard Henderson.

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