A lower-than-expected inflation reading eased concern that prices will spike higher if growth picks up
U.S. equities advanced overnight following a weak inflation report, while Treasury yields turned lower after a 10-year note auction. The consumer price index advanced 0.4% last month, matching the estimate of economists. The rate of inflation over the past 12 months moved up to 1.7% from 1.4%. But core inflation, excluding food and energy, posted a much smaller 0.1% gain. A lower-than-expected inflation reading eased concern that prices will spike higher if growth picks up. The S&P 500 rose 0.60%, the Dow gained 1.46%, while the Nasdaq slipped less than 0.1%.
Asian stocks climbed on Thursday amid easing worries that price pressures could push interest rates higher. Tokyo’s Nikkei 225 index gained 0.71% and the Hang Seng in Hong Kong added 1.18%. South Korea’s Kospi surged 2.18%, while the Shanghai Composite index jumped 2.08% as Chinese leaders prepared to wrap up the annual session of the largely ceremonial legislature.
European stocks opened modestly higher today, the DAX 30 in Germany continuing to gradually push to record levels due to a more positive risk tone in the global financial markets as bond yields look steadier for the time being. US stock index futures are also on the rise ahead of the opening bell, with Nasdaq futures up 1.4% on the day.
Meanwhile, the greenback is slightly lower nearly across the board while looking relatively steady in general. Now, market focus shifts to the ECB meeting. If Lagarde just repeats her previous messages that the rise in yields is undesired, that won’t be sufficient to push the euro higher. EURUSD was last seen nearing the 1.1950 region. However, the common currency could reverse recent gains if the central bank’s rhetoric disappoints the euro bulls later in the day.