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US inflation data to provide insight into the Fed's course

The latest data on consumer prices in the US is eagerly awaited this afternoon. The data could shed light on the timing of the Federal Reserve's first interest rate cut. Investors have been cautious ahead of the data, with profit-taking taking centre stage in equity markets at the start of the week. 

Alessandro Fezzi, LGT
Reading time
5 minutes
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Rising gasoline prices are likely to have dampened US inflation in February and could underpin the Federal Reserve's decision to cut interest rates slowly. Economists expect prices for a broad range of goods and services to have risen 0.4% in February from the previous month, just above January's 0.3% pace. Core inflation, which excludes food and energy, is expected to have risen by 0.3%, also a tenth of a percentage point above the previous month. Year-on-year, headline inflation is expected to rise by 3.1% and core inflation by 3.7%. In January, annual inflation was 3.1% and 3.9% in the core. Although US inflation has fallen sharply since peaking in mid-2002, core inflation in particular remains too high and may force the Fed to wait even longer before making its first rate cut.

After recent profit-taking, the New York Stock Exchange was quiet yesterday. The Dow Jones Industrial closed at 38,769.66, up around 0.1%, ahead of US inflation data due at 13:30 (CET) due to the early summer time changeover in the US. The broad S&P 500 started the week 0.1% lower, closing at 5,117.94. The tech-heavy indices on the Nasdaq lost just under 0.4%. However, this was after both the S&P 500 and the Nasdaq 100 hit record highs last Friday. Cryptocurrencies are attracting a lot of attention at the moment after bitcoin hit new highs earlier in the week. The price of bitcoin climbed above USD 72,000 for the first time on Monday.

Asia-Pacific markets were mostly higher on Tuesday, led by gains in Hong Kong. The Hang Seng Index gained more than 2% and China's CSI 300 rose 0.4%. Meanwhile, the annual session of the Chinese parliament came to an end. China has set a GDP growth target of around 5% for 2024 and has put industrial development at the top of its priority list. In Tokyo, the Nikkei 225 lost around 0.2%, trading lower for the second day in a row. The broader Topix was down just under 0.7%. South Korea's Kospi regained some ground to trade around 0.5% higher, while the small cap Kosdaq gained 1.2%. In Australia, the S&P/ASX 200 closed around 0.1% higher.

Corporate news in focus: Q4 results from Galenica, Generali and Porsche AG.

Economic data in focus: UK employment report, consumer price data from Germany and the US.


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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Lten steht Ihnen ein Berater der Bank gerne zur Verfügung.

Herausgeber: LGT Bank (Schweiz) AG, Glärnischstrasse 36, CH-8027 Zürich
Redaktion: Alessandro Fezzi
Quelle: LGT Bank (Schweiz) AG

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