Stock markets gain, dollar down before US inflation data
Published: 04:01 PM,Jan 11,2024 | EDITED : 08:01 PM,Jan 11,2024
Pedestrians walk past a signboard showing the closing numbers on the Tokyo Stock Exchange, along a street in Tokyo. - AFP
LONDON: Major stock markets mostly rose and the dollar fell on Thursday before the release of US inflation data that could have a huge bearing on the Federal Reserve's timetable for cutting interest rates.
The positive vibes across Asian and European trading floors followed gains Wednesday on Wall Street, where tech firms bounced after a relatively dour start to the year and dealers were gearing up for annual earnings from the world's biggest companies.
'Today sees the latest US inflation data take centre stage, with sentiment for US stocks expected to remain highly sensitive to any changes in the outlook for monetary policy going forward,' said Joshua Mahony, chief market analyst at Scope Markets.
Wall Street won support Wednesday thanks to share-price gains for tech titans Amazon, Microsoft and Google-parent Alphabet, which have had a weak start to 2024.
Tokyo led the way in Asia on Thursday, piling on 1.8 per cent to finish above 35,000 points for the first time since early 1990 as a weak yen boosted exporters.
Bitcoin held at around $46,600, having burst above $47,700 earlier in the day on news that the US Securities and Exchange Commission had given the go-ahead for wider trading of the world's biggest cryptocurrency in the form of exchange-traded funds.
The SEC approved the plans for 11 ETFs to list on leading exchanges including the New York Stock Exchange 'on an accelerated basis', it said.
Analysts said the unit failed to take off after the news as the decision had largely been priced in over recent weeks.
ETFs are traded on public markets, granting investors exposure to price movements in asset prices without taking direct ownership of the underlying assets.
Prices excluding volatile items like food and energy in December are forecast to remain unchanged at 0.3% from the previous month, while year-on-year inflation is expected to slow to 3.8 per cent from November's 4 per cent.
'Data in line, or ideally softer than expected, will keep the Fed doves in charge of the market,' said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
'The ongoing tensions in the Red Sea region and the rising cost of moving goods will remain in the back of our minds... but disinflation remains the base case scenario for 2024 due to weakening demand.'
Money markets see a 68.8 per cent chance the central bank will deliver its first rate cut of at least 25 basis points (bps) in March and a 95.6 per cent probability of another reduction in May, despite recent pushback from policymakers.
A separate report at 8:30 am. ET is expected to show that the number of Americans filing for unemployment benefits rose to 210,000 in the week ending January 6, from 202,000 a week ago.
Crypto Stocks like Coinbase Bitfarms and Riot Platforms advanced between 4.5 per cent and 7 per cent in premarket trading after the US securities regulator approved the first US-listed exchange-traded funds (ETFs) to track Bitcoin.
Citigroup declined 1.2 per cent after a filing showed the lender booked about $3.8 billion in combined charges and reserves that will erode its fourth-quarter earnings, to be reported on Friday.
Other banks like JP Morgan Chase, Bank of America and Wells Fargo are also set to report on Friday.
Boeing inched up 0.4 per cent as carriers continue to wait for regulatory approvals to resume flying its 737 MAX 9 planes after a cabin panel blowout that the airline said was caused by a 'quality' issue.
During the session, investors will also parse remarks by Richmond Fed President Thomas Barkin, a voting member this year. - Reuters
The positive vibes across Asian and European trading floors followed gains Wednesday on Wall Street, where tech firms bounced after a relatively dour start to the year and dealers were gearing up for annual earnings from the world's biggest companies.
'Today sees the latest US inflation data take centre stage, with sentiment for US stocks expected to remain highly sensitive to any changes in the outlook for monetary policy going forward,' said Joshua Mahony, chief market analyst at Scope Markets.
Wall Street won support Wednesday thanks to share-price gains for tech titans Amazon, Microsoft and Google-parent Alphabet, which have had a weak start to 2024.
Tokyo led the way in Asia on Thursday, piling on 1.8 per cent to finish above 35,000 points for the first time since early 1990 as a weak yen boosted exporters.
Bitcoin held at around $46,600, having burst above $47,700 earlier in the day on news that the US Securities and Exchange Commission had given the go-ahead for wider trading of the world's biggest cryptocurrency in the form of exchange-traded funds.
The SEC approved the plans for 11 ETFs to list on leading exchanges including the New York Stock Exchange 'on an accelerated basis', it said.
Analysts said the unit failed to take off after the news as the decision had largely been priced in over recent weeks.
ETFs are traded on public markets, granting investors exposure to price movements in asset prices without taking direct ownership of the underlying assets.
Prices excluding volatile items like food and energy in December are forecast to remain unchanged at 0.3% from the previous month, while year-on-year inflation is expected to slow to 3.8 per cent from November's 4 per cent.
'Data in line, or ideally softer than expected, will keep the Fed doves in charge of the market,' said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
'The ongoing tensions in the Red Sea region and the rising cost of moving goods will remain in the back of our minds... but disinflation remains the base case scenario for 2024 due to weakening demand.'
Money markets see a 68.8 per cent chance the central bank will deliver its first rate cut of at least 25 basis points (bps) in March and a 95.6 per cent probability of another reduction in May, despite recent pushback from policymakers.
A separate report at 8:30 am. ET is expected to show that the number of Americans filing for unemployment benefits rose to 210,000 in the week ending January 6, from 202,000 a week ago.
Crypto Stocks like Coinbase Bitfarms and Riot Platforms advanced between 4.5 per cent and 7 per cent in premarket trading after the US securities regulator approved the first US-listed exchange-traded funds (ETFs) to track Bitcoin.
Citigroup declined 1.2 per cent after a filing showed the lender booked about $3.8 billion in combined charges and reserves that will erode its fourth-quarter earnings, to be reported on Friday.
Other banks like JP Morgan Chase, Bank of America and Wells Fargo are also set to report on Friday.
Boeing inched up 0.4 per cent as carriers continue to wait for regulatory approvals to resume flying its 737 MAX 9 planes after a cabin panel blowout that the airline said was caused by a 'quality' issue.
During the session, investors will also parse remarks by Richmond Fed President Thomas Barkin, a voting member this year. - Reuters