US Futures and Bonds Decline with focus on PCE – Europe Market Wrap

US stock futures dipped and Treasuries sank as investors awaited a print of the Fed’s main inflation indicator, which will help determine the route forward for interest rates.

Contracts for the S&P 500 and the tech-heavy Nasdaq 100 both fell by approximately 0.2%.

European stocks fluctuated amid another busy earnings day.

Thursday’s US core PCE gauge will likely corroborate previous Fed members’ comments that there is no rush to loosen monetary policy and highlight the twists and turns on the path to the central bank’s 2% inflation objective. A higher-than-expected number might weaken forecasts of three quarter-point rate cuts by year-end.

Treasury rates increased, with the more policy-sensitive two-year note rising 5 BPS. Yields in Europe also rose on mixed readings on price pressures from France and Spain, with German inflation expected later. The dollar held steady, but the yen rose the most in more than a week as Bank of Japan Board Member Takata indicated that the case for abandoning the BoJ’s zero interest rate policy is gaining traction.

Bitcoin rose above $60k for the first time in more than two years on Wednesday, fuelled by new demand from exchange-traded funds. The currency nearly reached $64k. The 2021 record high is little about $69k.