Stronger-than-expected figures could fuel concerns over rising consumer prices and thus push bond yields higher again
Wall Street equities surged overnight, with the Nasdaq jumping over 3.5% to recoup its losses from the previous session, posting its biggest single-day rise in four months. In individual stocks, Tesla shares rallied the most in almost a year, while Microsoft saw the biggest session gains in over a month as U.S. bond yields retreated from peaks. U.S. 10-year Treasury note yields eased to 1.523% after climbing to 1.613% earlier in the week. As such, the S&P 500 index closed up 1.42%, the Nasdaq Composite index surged 3.7%, while the Dow Jones Industrial Average rose just 0.1%.
Despite a rally on Wall Street, Asian markets were mostly lower on Wednesday as investors expressed a more cautious tone ahead of the US CPI data due later today. Stronger-than-expected figures could fuel concerns over rising consumer prices and thus push bond yields higher again. The Shanghai Composite Index erased early gains, to shed 0.05% while the Nikkei 225 in Tokyo was about flat. The Hang Seng in Hong Kong added 0.35%, the Kospi in Seoul fell 0.60% while Sydney’s S&P/ASX 200 slid 0.84%.
In Europe, stocks opened lower, losing momentum after the previous rally, with the pan-European Stoxx 600 slipping 0.3% below the flat-line in early trade. U.S. stock futures slipped in early trading as well. A cautious tone in Europe is also due to the upcoming meeting of the European Central Bank due on Thursday.
Meanwhile, the greenback is back on the rise across the board following a short-lived retreat seen on Tuesday. As such, EURUSD failed to cling to the 1.1900 figure and was last seen flirting with the 1.1870 intermediate support during the European hours. Furthermore, the selling pressure surrounding the common currency could intensify later in the day if the US inflation data exceeds expectations, adding to the safe-haven dollar demand.