Markets Steady Ahead of Inflation Data – Nasdaq up 0.2%
U.S. stock markets experienced a relatively calm day yesterday as investors awaited key inflation data from the U.S. The Dow Jones Industrial Average dropped 0.36%, the S&P 500 remained flat, while the Nasdaq gained 0.21%, bolstered by a strong performance from Nvidia. Treasury yields continued to decline, with the rate-sensitive 2-year yield falling 4.4 basis points to 4.009% and the benchmark 10-year yield dropping 3.8 basis points to 3.904%. Commodities saw significant movement as haven flows increased due to escalating concerns about the conflict in the Middle East. Oil prices rose for the fifth consecutive day, with Brent crude increasing by 3.3% to $82.30 per barrel and WTI climbing 4.2% to $80.06 per barrel. Gold also benefited, gaining 1.5% to reach $2,468 an ounce by the close of trading in New York.
UK Data in Focus This Week
While global market attention will primarily be on the upcoming U.S. CPI data, which is expected to have a substantial impact on the Federal Reserve’s highly anticipated September meeting, there is also a significant amount of key UK data scheduled for release this week. This data could greatly influence the Bank of England’s decisions, particularly the CPI figures due on Wednesday. Despite a relatively dovish Monetary Policy Committee, there is only a 36% chance of a rate cut priced in for September, and a stronger-than-expected inflation report could lower this probability further. In addition to the CPI update, employment, retail sales, and GDP figures are also due, all of which could impact the Bank of England’s actions and add volatility to the pound and sterling markets.
Event Calendar Picks Up for Traders Today
After a quiet start to the trading week, market participants are now looking ahead to several key data releases from the U.S. The Asian session kicks off with Australia’s latest Wage Price Index numbers, followed by the London session’s first major UK data release of the week—employment figures, with the headline Claimant Count expected to show a 14k increase for the month. The New York session will then see the release of the first inflation data from the U.S. in the form of the Producer Price Index (PPI). While this may not have the same level of impact as Wednesday’s CPI data, traders still anticipate some volatility around the event.
