US Futures Waver as Traders Are Side-tracked by CPI and Debate – Europe Market Wrap

US equities futures are shaky as markets enter a critical time, with significant inflation data on Wednesday followed by interest-rate decisions on both sides of the Atlantic.

Contracts on the S&P 500 traded barely changed after the underlying measure jumped 1.2% on Monday, rebounding from its worst start to the month since 1953. Benchmark Treasury rates increased for a second day, while the Dollar maintained Monday’s gains.

The market is cautious as investors try to combine US recession fears with the possibility of a soft landing, amid concerns that the Fed may be falling behind the curve as the labour market slows. Meanwhile, US political risk has returned to the spotlight, with former President Trump set to debate US Vice President Harris later Tuesday.

Morgan Stanley expects the euro to fall to parity with the dollar within months, citing concerns of aggressive ECB policy easing. The US bank predicts the single currency to fall to $1.02 by the end of the year, a about 7% drop from its current level of $1.1037. The call is the most pessimistic among currency analysts.

West Texas Intermediate crude slid 1% to $68 a barrel, while spot gold was slightly changed.