US equity futures were flat on Thursday as investors weighed the implications of weaker-than-expected US inflation data for so-called reflation trading betting on a recovery from the pandemic.
S&P 500 contracts turned shortly after the index ended nearly flat near an all-time high. The yield on 10-year Treasuries fell to 1.12% on Wednesday after the US. Core consumer prices indicated low inflation. Cash Treasuries will not trade until the London open due to a holiday in Japan. An indicator of Asian equities was stable, with the markets of China and South Korea also closed.
The dollar maintained losses as a result of the inflation report. Crude oil slipped after a period of gains.
The CPI data is part of a debate in financial markets about the course of inflation. Despite the dovish January figure, some investors continue to expect an intensification of price pressures in the coming months as President Joe Biden pushes for more stimulus and more vaccines allow virus-related restrictions to ease. , which stimulates consumer spending.
“While inflation is not showing up in the data at this time, inflation is on its way thanks to fiscal and monetary stimulus and stifled consumer demand that should intensify as the economy reopens,” said Nancy Davis, founder of Quadratic Capital Management, on a note.
In a speech on Wednesday, Federal Reserve Chairman Jerome Powell said the US job market is far from full recovery and called on both lawmakers and the private sector to support workers.
Here are some key events to come:
- The Lunar New Year holidays begin in the nations of Asia, and China stops for a week.
- The Bank of Russia’s political decision comes on Friday.
These are the main movements in the markets:
- S&P 500 futures were flat at 9:13 am in Tokyo. The S&P 500 Index closed little changed.
- Australia’s S & P / ASX 200 Index fell 0.1%.
- Hong Kong’s Hang Seng Index futures fell 0.3% earlier.
- The yen was at 104.64 to the dollar.
- The yuan offshore was at 6.4294 to the dollar.
- The Bloomberg Dollar Spot Index was little changed.
- The euro was stable at $ 1.2118.
- The 10-year Treasury yield fell around three basis points to 1.12% on Wednesday.
- The yield on Australia’s 10-year bonds fell three basis points to 1.19%.
- West Texas Intermediate crude fell 0.6% to $ 58.36 a barrel.
- Gold lost 0.1% to $ 1,841.33 an ounce.
– With the assistance of Claire Ballentine and Olivia Raimonde