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Markets Update: European markets maintain a positive bias ahead of the US CPI release, with tariffs tempering optimism. US futures exhibit mixed performance. The USD remains stable ahead of the CPI data, while the JPY weakens due to the prevailing yield environment. Crude prices decline following unexpected increases in headline crude inventories. The January CPI data is scheduled for release at 8:30 a.m. ET. Futures indicate a slight decrease, with the Dow down 0.16%, S&P 500 down 0.11%, and Nasdaq marginally up by 0.01%.
Global Markets Roundup: 12 February 2025
FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!
Equity Markets
U.S. stock index futures showed little movement on Wednesday as investors remained cautious ahead of the release of pivotal inflation data that could impact the Federal Reserve's interest rate decisions for the year. The consumer price index (CPI) data for January, expected at 8:30 a.m. ET, is anticipated to show a 0.3% month-on-month increase and a steady 2.9% annual rise, according to a Reuters poll. Core inflation, excluding food and energy, is projected to increase by 0.3% monthly and decrease to 3.1% annually. Federal Reserve Chair Jerome Powell will begin his second day of Congressional testimony shortly after the CPI report's release.
Dow E-minis were down 70 points (0.16%), S&P 500 E-minis were down 6.75 points (0.11%), and Nasdaq 100 E-minis were up 1.5 points (0.01%). In the previous session, the S&P 500 ended nearly flat, while the Nasdaq declined by approximately 0.4%. The STOXX 600 reached record highs again, suggesting continued strong interest in European stocks. However, Barclays notes that short covering in European equities appears to be complete, and the Euro STOXX 50 is now in overbought territory, raising questions about the sustainability of this trend.
Currencies
The DXY index remains steady ahead of the impending US CPI data, with core month-on-month CPI anticipated to increase to 0.3% from 0.2%, and year-on-year expected to decrease to 3.1% from 3.2%. The headline month-on-month CPI is forecast to decline to 0.3% from 0.4%, while the year-on-year CPI is projected to remain at 2.9%. Federal Reserve Chair Jerome Powell will address The House today, with Bostic and Waller also scheduled to speak, the latter focusing on stablecoins. The DXY index is currently below the 108 mark, approaching the 50-day moving average at 107.95. The Euro continues to strengthen against the USD for a third consecutive session. Despite this, the durability of this upward trend remains uncertain due to the Eurozone's ambiguous growth outlook, the European Central Bank's easing bias, and the Eurozone's susceptibility to tariff actions by the Trump administration. ECB's Nagel is expected to speak on the natural rate later today. EURUSD has reached a high of 1.0379 but has yet to surpass yesterday's peak of 1.0381.
The Japanese Yen is significantly underperforming among the major currencies, likely due to the relatively higher yield environment. Japanese-specific factors have been minimal, aside from non-significant comments from BoJ Governor Ueda, who noted the dependency of monetary adjustment pace on economic conditions and acknowledged the negative impact of rising inflation, including fresh foods, on households. USD/JPY has surpassed its 200-day moving average at 152.70, reaching a session peak of 153.88. The focus is now on testing the 154 level.
The British Pound remains stable against the USD, with the sole event on the UK calendar today being a speech by MPC member Greene at 15:00 GMT. Greene's remarks follow those of dovish dissenter Mann, who explained her reasons for her dovish dissent at the last meeting, noting that "active rate policy does not mean cut, cut, cut," and suggested she may not support another 50 basis points cut at the next meeting. The cable briefly exceeded yesterday's peak of 1.2454 but faltered before reaching the 50-day moving average at 1.2476. The Australian and New Zealand dollars are both marginally weaker in quiet trading. AUD/USD is pausing after two consecutive sessions of gains, which brought the pair above its 50-day moving average at 0.6271 but failed to sustain a move above the 0.63 mark, with a session peak at 0.6309.
Commodities
In the commodities market, traders experienced a subdued session, retracting some of the gains driven by geopolitical tensions in the previous session. Despite this, unresolved issues between the US, Israel, and Gaza continue to underpin market dynamics. Brent crude is trading at the lower end of a USD 76.22-91 per barrel range. Spot gold has decreased slightly, by approximately USD 5.00 per ounce, with price action remaining constrained within a USD 2883.79-2900.75 per ounce range. Base metals trading exhibited mixed results as markets exercised caution ahead of the US CPI data and the potential for reciprocal tariffs from the Trump administration. Currently, 3-month LME copper is trading within a USD 9,347.85-9,416.00 per ton range.
In the agricultural commodities markets, Chicago corn and wheat futures increased on Wednesday as traders anticipated U.S. inflation data and additional insights on crop weather and U.S. tariff policies. Soybeans continued their decline from Tuesday, influenced by higher-than-expected forecasts of U.S. soybean and corn stocks from the U.S. Department of Agriculture (USDA). The most-active soybean contract on the Chicago Board of Trade (CBOT) decreased by 0.5% to $10.38-1/2 per bushel, while CBOT corn marginally rose by 0.1% to $4.84-1/2 per bushel. CBOT wheat increased by 0.6% to $5.80-1/2 per bushel, breaking a three-session decline. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!
Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team