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US inflation data in the spotlight

The much-anticipated inflation data from the US is due out today. US consumer prices are expected to have risen slightly at the end of last year. This could prolong the Federal Reserve's pause on interest rates for the time being. On Wall Street, stock indexes posted gains in the middle of the week. In Tokyo, the fireworks continued, with the Nikkei 225 rising above 35,000 for the first time since February 1990. 

Alessandro Fezzi, LGT
Reading time
5 minutes
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In New York, both the main indices and the tech-heavy Nasdaq posted solid daily gains. The Dow Jones Industrial closed 0.45% higher at 37,695.73 and the broader S&P 500 rose 0.57% to 4,783.45. The Nasdaq 100 was up just under 0.7%, driven by gains in major technology stocks such as Microsoft, Alphabet and Nvidia. The focus now shifts to this afternoon's (14:30) US inflation data. This will be a key factor for the Federal Reserve in setting monetary policy. According to the Fed, the battle against inflation has not yet been won and a renewed rise in consumer prices could at least prolong the pause in interest rates or delay the long-awaited easing of interest rates in the capital markets. Meanwhile, the benchmark ten-year US Treasury yield remains just above 4%.

Most Asian stock markets continued to recover from the weak start to the year. The Nikkei 225 rose a further 1.8% to close above 35,000 for the first time since February 1990. The Topix also rose by 1.6%, reaching a 33-year high. South Korea's Kospi rose 0.5% after the Bank of Korea left its key interest rate unchanged at 3.50% for the eighth consecutive meeting. In Hong Kong, the Hang Seng Index gained around 1.7% and the Chinese CSI 300 Index was up 0.4%. In Australia, the S&P/ASX 200 was up 0.5% for the day, recovering from Wednesday's losses.

According to ECB vice-president Luis de Guindos, the decline in eurozone inflation will continue at a slower pace this year, but the pace of inflation decline observed in 2023 is likely to slow in 2024. This is despite weaker economic growth in the euro area. Looking ahead to the second half of 2023, the ECB Vice-President sees a risk of a technical recession.

Corporate news in focus: Suedzucker Q3.

Economic data in focus: European Commission Economic Bulletin (09:00), Italy Industrial Production November (09:00), US Consumer Prices December and Initial Jobless Claims Weekly (14:30).



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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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