Wednesday, January 15
► European equity futures inched higher ahead of the key US CPI report. The Euro Stoxx 600 futures climbed nearly 0.4%. Investors remain cautious. Inflation data in the UK showed a surprising drop to 2.5% in December which was taken positively, while Spain’s inflation rose to 2.8%, the highest since July 2024 (in line with expectations). France’s inflation remained steady at 1.3%. Germany's economy remained in recession and contracted by 0.2% last year in-line with expectations after shrinking by 0.3% in 2023. Eurozone industrial production data rose 0.2% MoM slightly below expectations of a 0.3% increase – but contracted 1.9% YoY.
► US equity futures are slightly up, with the S&P 500, Nasdaq, and Dow Jones trading 0.1% – 0.2% higher but generally with little movement as investors awaited the US December CPI report later today. Economists anticipate a 0.3% rise in the core consumer price index (CPI) for December, which could influence the Fed’s policy direction. Markets have nearly priced out rate cuts for 2025. The 10-year Treasury yield fell 2 basis points to 4.77%, with bond markets finding temporary relief ahead of the important CPI report. US financial heavyweights, including JPMorgan Chase, Goldman Sachs, and Wells Fargo are set to report results today. Analysts expect strong trading revenues to offset declining net interest income.
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