Equities directionless ahead of CPI and U.S.-China summit
US stocks were mixed and little changed on Monday as investors were cautious ahead of October’s reading of the consumer price index due later in the day. Inflation is expected to have grown 3.3% year over year and 0.1% on a monthly basis. Also, sentiment among investors was hurt by Moody’s decision to downgrade the US’ economic outlook over the weekend. The S&P 500 finished down less than 0.1%, the Nasdaq Composite shed 0.22% and the Dow Jones advanced 0.16%. Elsewhere, Treasury yields were flat during the session.
In Asia, equities were mostly higher on Tuesday in anticipation of U.S.-China summit. Tomorrow, Chinese leader Xi Jinping is set to meet with President Joe Biden on the sidelines of a Pacific Rim summit in California. Japan’s benchmark Nikkei 225 gained 0.43%, Australia’s S&P/ASX 200 advanced 0.83%, South Korea’s Kospi added 1.23%. Bucking the trend, Hong Kong’s Hang Seng dropped 0.09% while the Shanghai Composite edged 0.31% higher.
European stocks opened mixed on Tuesday, struggling for direction ahead of this week’s major events including preliminary third GDP data from the Eurozone and Germany’s ZEW survey of economic sentiment. U.S. stock futures were flat in early pre-market trading as investors prepare for the October CPI reading that could affect Fed rates expectations. In the UK, the ILO Unemployment Rate held steady at 4.2% in the third quarter, the official report showed. The number of people claiming jobless benefits climbed by nearly 18,000 in September.
In currencies, the dollar struggles for direction today after the recent slide from the 106.00 figure that capped recovery last week. The USD index has settled slightly above the 105.50 zone, with traders awaiting US CPI data that will set fresh direction for the greenback. Weaker-than-expected figures would hurt the currency further and could trigger a retreat below the 105.40 immediate support. On the upside, a decisive break above 106.00 would improve the near-term technical picture surrounding the US dollar.