Markets Await CPI – Europe Market Wrap

 Treasury bonds increased but US equities futures fell ahead of much anticipated inflation data that may determine when the Federal Reserve starts cutting interest rates.

Nvidia fell 1% in premarket trade. Contracts on the rate-sensitive Nasdaq 100 fell 0.6%, while those on the S&P 500 declined 0.4%, prolonging the loss in the main US stock gauge on Monday from a high of over 5,050.

A more rapid shift to monetary easing may not be justified by the inflation report, which is expected to show the first reading below 3% on year-over-year headline inflation since March 2021. The US economy has surprised on the upside with employment, manufacturing, and economic growth proving resilient to the fastest rate increases in a generation.

UK Average Weekly Earnings YoY Actual 5.8% (Forecast 5.6%, Previous 6.5%) [Sterling strengthened, FTSE 100 weakened]

Swiss CPI YoY Actual 1.3% (Forecast 1.7%, Previous 1.7%) [Swiss Franc weakened]

UK Rate futures point to 69 BPS of BoE rate cuts by December compared with 78 BPS before labour market data.