Tuesday may see a surge in European stock markets as investors keenly wait for the crucial US Consumer Price Index (CPI) data to understand when the Federal Reserve will start lowering interest rates. Experts predict a rise of 0.4 percent in consumer prices in February, following a 0.3 percent increase in January.
The yearly rate of consumer price growth is predicted to remain constant from the previous month at 3.1 percent, while the yearly growth for the core consumer price, excluding food and energy prices, is expected to decrease to 3.7 percent from 3.9 percent.
The Federal Reserve is forecasted to maintain the current rates at its next monetary policy meeting. However, today's CPI report, coupled with other scheduled reports for the week, such as data on producer price inflation, retail sales, industrial production, and consumer sentiment, might influence expectations regarding the time frame for lowering rates by the central bank.
Later in the day, the UK's labor market data and Germany's final consumer price figures will be released, highlighting a lesser day for the economic news of Europe.
Asian markets exhibited mixed results, with Hong Kong's Hang Seng index reaching its peak level in 2024, anticipating several companies to initiate share buybacks to leverage the current market valuations. Meanwhile, Japanese stocks continued to dwindle due to increasing expectations of Bank of Japan ceasing its negative interest rate policy as early as next week.
Kazuo Ueda, Bank of Japan Governor, expressed that the economy is rebounding, however, there are some signs of frailty, which added pressure on the yen. Amidst this, the dollar maintained its stability in Asian trading, gold had a slight decrease after nine continuous sessions of cultivating gains, and oil prices slightly increased awaiting monthly reports from OPEC and IEA due this week.
US stocks experienced a decline for two consecutive sessions overnight as Treasury yields saw a slight increase ahead of the crucial inflation data release. The Dow Jones increased marginally by 0.1 percent, while the S&P 500 experienced a dip of 0.1 percent and the tech-conscious Nasdaq Composite observed a decrease of 0.4 percent.
There was a downturn in European stocks for the first time in three days on Monday, due to uncertain interest rates. The pan-European STOXX 600 saw a decline by 0.4 percent. France's CAC 40 dipped by 0.1 percent and Germany's DAX fell by 0.4 percent, whereas the UK’s FTSE 100 slightly increased by 0.1 percent.
