February 3, 2023

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US Futures Gain as Traders Await Inflation Data: Markets Wrap

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(Bloomberg) — US equity futures rose Friday before a report on US producer prices that will be one of the final pieces of data to inform a rate decision by the Federal Reserve next week. The dollar fell.

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Contracts on the S&P 500 added 0.2% after the underlying benchmark notched its first advance this month. A European equity benchmark traded flat, paring its weekly loss to 1.7%. Asian equities headed for their sixth weekly gain, the longest such stretch in two years.

Treasury yields were little changed, with the 10-year rate hovering near 3.45%. The dollar dropped for the third day and against most of its major counterparts in the Group-of-10 currency basket as demand for haven investments eased.

Investors are taking heart from any signs of softness in prices that may allow policymakers around the world to be less hawkish and more supportive of growth. At the same time, Fed officials are leery of fanning stock rallies that ease financial conditions too much and thwart their inflation-fighting mission.

Friday’s US producer price index for November will offer a progress report on how effective the Fed’s campaign to quell inflation has been. The PPI in October cooled more than expected. And there are some signs the labor market has tempered, with continuing jobless claims climbing to the highest since early February.

Still, strategists from Morgan Stanley to JPMorgan Chase & Co. have warned investors against piling back into risk on hopes the Fed is getting close to pivoting to easier policy.

“We still think next year it’s going to be a pretty downbeat outlook for the global economy, given all the tightening we have seen so far this year,” Sylvia Sheng, global multi-asset strategist at JPMorgan Asset Management, said on Bloomberg Television.

Elsewhere in markets, oil rose Friday while heading for a weekly drop of around 10% after a volatile session on Thursday on concerns over economic outlook. Gold advanced for a fourth…

2022-12-09 03:33:38

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