It was an exceedingly quiet start to trading – perhaps because Tuesday afternoon sees the latest US inflation reading.
Yesterday’s bond auction proved to be something of a non-event, failing to cause any truly noticeable movement. That’s the first obstacle, then, cleared for the Dow Jones et al.
Next up is this afternoon’s CPI data. Analysts are expecting the standard figure to rise from 0.4% to 0.5% month-on-month, with the core reading up from 0.1% to 0.2%. Anything higher than those estimates will likely set alarm bells ringing; anything lower will act as reassurance about the pace of building inflationary pressures.
Since the entire market has been caught up in the inflation/interest rates/bond yield fears that have intermittently taken hold this year, Tuesday’s inflation figures are almost as relevant for Europe as they are for the US.
That explains why the European indices didn’t do much after the bell.
With sterling nudging higher, rising 0.1% against the dollar and 0.2% against the euro, the FTSE fell a further 0.3% to hit 6,880. This on a decent morning for UK data.
Though the GDP reading for February missed estimates, at 0.4% the country’s economy still grew despite lockdown. Industrial and manufacturing production both exceeded expectations, while construction output also outstripped forecasts.
In the Eurozone the DAX and CAC strained to rise 0.1% apiece, while the Spanish IBEX 35 fell 0.2%.
As for the Dow Jones, it is keeping its cards close to its chest. Closing 50 points lower last night, the index is currently pencilling in a 0.1% increase after the bell. There’s a reason those prospective gains are in pencil, however – the inflation reading at 1.30pm could well change everything.
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