(Bloomberg) — US futures steadied before inflation data due later Friday amid concern it may be yet another reason for the Federal Reserve to harden its resolve to pursue aggressive policy.
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Contracts on the Nasdaq 100 Index erased an earlier loss to trade little changed with S&P 500 futures. The gauge sank 2.5% Thursday on reports showing strength in the labor market and resilient consumer spending. The Stoxx Europe 600 opened 0.2% higher, extending its weekly advance to 0.8%.
More economic data validating the case for the Fed to keep hiking interest rates set a downbeat tone this week, putting technology stocks on course for their worst December since the bursting of the dotcom bubble two decades ago.
Read More: Tech Bulls Face Worst December in 20 Years as Fed Anxiety Grows
Looking ahead to later Friday, investors will be focused on the core PCE deflator, which is a key inflation measure tracked by the Fed.
“Markets are in a state of flux at the moment we have quite high inflation and interest rates that dont quite seem able to catch up,” Richard Harris, chief executive officer at Port Shelter Investment Management, said in an interview on Bloomberg TV. “You have to be careful with equities, but they are still a better bet than bonds at the moment.”
Treasury yields edged fractionally higher, adding to a move that pushed up the policy-sensitive two-year yield on Thursday. Japan’s benchmark 10-year yield slipped to 0.37%, below the central bank’s new upper limit of 0.5%.
Elsewhere in markets, oil headed for a substantial weekly gain as Russia said it may cut crude production in response to the price cap imposed by the Group of Seven on its exports, highlighting risks to global supplies in the new year.
Key events this week:
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US consumer income, new home sales, US durable goods, PCE deflator, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 3:29 a.m. New York time
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Nasdaq 100 futures were little changed
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Futures on the Dow Jones Industrial Average were little changed
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The Stoxx Europe 600 rose 0.2%
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The MSCI World index fell 0.1%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0603
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The British pound rose 0.2% to $1.2059
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The Japanese yen fell 0.3% to 132.69 per dollar
Cryptocurrencies
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Bitcoin rose 0.2% to $16,828.68
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Ether rose 0.2% to $1,217.6
Bonds
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The yield on 10-year Treasuries was little changed at 3.69%
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Germany’s 10-year yield advanced one basis point to 2.37%
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Britain’s 10-year yield advanced four basis points to 3.63%
Commodities
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West Texas Intermediate crude rose 1% to $78.25 a barrel
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Gold futures rose 0.5% to $1,803.90 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rheaa Rao.
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