Stocks Slip Before U.S. CPI; Crude Oil Advances: Markets Wrap

On Sep 14, 2021

(Bloomberg) — Stocks and U.S. futures slipped ahead of inflation data that could influence expectations about the Federal Reserve’s likely timing for paring stimulus.

The basic-resources sector led declines in Europe’s Stoxx 600 Index as iron ore dropped for a fifth day, with production curbs in China weighing on demand and investors awaiting industrial and economic data due this week. Crude oil gained for a third day as another hurricane menaced a key U.S. hub just weeks after Ida hammered local output. Treasury yields and the dollar were steady.

The focus is firmly on price pressures, with a gauge of commodities around a decade-high and a report later Tuesday expected to show a fourth month of U.S. inflation at 5% or more. The global stock-market rally is facing headwinds amid concerns about the delta virus strain and risks from elevated inflation, which is being stoked by Covid-19 related supply disruptions.

“Investors don’t want to have massive positions before the inflation data as the risks are to the upside as Covid inflation continues to hamper supply chains,” Edward Moya, a senior market analyst at Oanda, said in a note. “If inflation comes in hotter-than-expected, taper expectations could shift from December to November.”

Japan’s Nikkei 225 Stock Average was set for its highest close since 1990. Hong Kong and China wavered as traders evaluated the troubles of China Evergrande Group, Beijing’s regulatory curbs and a virus flareup.

Indebted developer Evergrande, one of the biggest financial worries in China, said it hired advisers to explore solutions for its cash crunch. The company is facing mounting protests by home-buyers, retail investors and even employees as it struggles to meet its obligations.

Here are some events to watch this week:

U.S. consumer-price index, TuesdayApple product-launch event, TuesdayChina retail sales, property prices, industrial production, WednesdayQuadruple witching day for U.S. markets, Friday

For more market analysis, read our MLIV blog.

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.3% as of 8:38 a.m. London timeFutures on the S&P 500 fell 0.1%Futures on the Nasdaq 100 fell 0.2%Futures on the Dow Jones Industrial Average were little changedThe MSCI Asia Pacific Index fell 0.5%The MSCI Emerging Markets Index fell 0.6%

Currencies

The Bloomberg Dollar Spot Index fell 0.1%The euro rose 0.1% to $1.1827The Japanese yen was little changed at 109.98 per dollarThe offshore yuan was little changed at 6.4382 per dollarThe British pound rose 0.2% to $1.3872

Bonds

The yield on 10-year Treasuries was little changed at 1.33%Germany’s 10-year yield advanced two basis points to -0.31%Britain’s 10-year yield advanced two basis points to 0.77%

Commodities

Brent crude rose 0.6% to $73.93 a barrelSpot gold was little changed

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