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Inflation data in focus ahead of Fed meeting

Investors are eagerly awaiting US inflation data on Tuesday for any last-minute details that could influence the Federal Reserve’s (Fed) interest rate decision due the next day. German inflation and economic sentiment data will likewise provide insights into the European Central Bank’s (ECB) policy decision due Thursday.

Shane Strowmatt, LGT
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In New York, tech stocks started the week by continuing to dominate the broader market. The Nasdaq-100 jumped 1.76% to end at 14,784.30 points on Monday. Despite the slump late last year, tech stocks have come roaring back with Apple stock closing up 1.56% to reach a new all-time high of 183.79 US dollars. Chipmaker Intel gained 5.52%. The broader S&P 500 rose 0.93% to close at 4,338.93 points while the Dow Jones Industrial increased 0.56%, finishing the session at 34,066.33 points.

After ten interest rate increases in a row, market participants seem confident that the Fed will pause its rate hiking cycle on Wednesday, leaving its benchmark interest rate between 5% and 5.25%. Last week, surprise hikes by the Bank of Canada and Australia’s central bank uneased markets, spreading fears that the Fed could follow suit. After Wednesday’s Fed decision, the ECB will announce its policy decision on Thursday and the Bank of Japan will do the same on Friday.

In the Asia-Pacific region, stock markets on Tuesday mostly picked up on the positive sentiment from the US a day earlier. In Japan, the Nikkei 225 was trading up about 2%, breaking the 33,000-point mark for the first time since 1990. South Korea’s Kospi rose 0.6%. In China, markets were reacting to a short-term lending rate cut by the Chinese central bank. The People’s Bank of China lowered its seven-day repo rate by 10 basis points on Tuesday. The move comes as the reopening of the world’s second-largest economy this year has largely failed to keep up with market participants’ expectations. In mainland China, the Shanghai Composite was trading marginally lower, and the Shenzhen Component was slightly higher. Hong Kong's Hang Seng Index gained 0.4%.

Corporate news in focus: Home Depot Investor Day.

Economic data in focus: UK unemployment (08:00 CET), German Consumer Price Index (08:00), ZEW Indicator of Economic Sentiment (11:00), US Consumer Price Index (14:30), Bank of England Governor Andrew Bailey speaks at Lords Economic Affairs Committee (16:00).

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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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