Morning Chronicle - US cautious ahead of inflation data, European stocks advance

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US cautious ahead of inflation data, European stocks advance
US cautious ahead of inflation data, European stocks advance / Photo: Charly TRIBALLEAU - AFP/File

US cautious ahead of inflation data, European stocks advance

US stocks dipped on Monday while European equities mostly rose as investors awaited US inflation data and other major economic releases due this week.

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Another record close for the S&P 500 in New York on Friday did little to inspire buying Monday, with key markets in Asia shut for the Lunar New Year break.

Ahead of Tuesday's US inflation print, Wall Street on Friday had welcomed revised data showing the US consumer price index (CPI) cooling in December.

That added to optimism that the Federal Reserve was on course to bring inflation under control, though observers were sceptical as to whether officials would cut US interest rates as early as markets expect.

"Indices will be waiting patiently for tomorrow's US inflation data, with market predictions of a sharp... decline in the headline (January) CPI figure providing a potential tailwind for equities," noted Joshua Mahony, chief market analyst at trading group Scope Markets.

Patrick O'Hare at noted that while every CPI reading is important, their impact on when the Fed may begin cutting interest rates is currently giving them outsize importance.

"Every inflation report will have added importance given the market's awareness that the Fed is watching every inflation report to get a feel for when it might be able to cut the target range for the fed funds rate." he said.

Wall Street stocks dipped at the open of trading, although the S&P 500 index held near its first close above 5,000 points, which it reached thanks to share-price surges in tech titans Amazon, Apple and Microsoft following a strong earnings season.

In Europe, eurozone stocks were higher in afternoon trade, but London stocks were flat ahead of UK inflation, GDP, retail sales and employment data to be released later this week.

But Asian investors were a little less enthusiastic, with Sydney, Bangkok, Mumbai and Wellington ending lower Monday -- and Jakarta and Manila edging higher.

Tokyo, Hong Kong, Shanghai, Taipei, Seoul, Singapore and Kuala Lumpur were closed for the regional holiday season.

Oil prices fell before key market updates from the Organisation of Petroleum Exporting Countries and International Energy Agency.

"This week sees both OPEC and the IEA release their latest monthly reports, with markets keeping a close eye out for any updated supply and demand forecasts," said analyst Mahony.

The IEA energy watchdog last month forecast world oil supplies to rise further this year as sliding demand growth amid China's economic weakness offsets fears of a wider conflict in the crude-rich Middle East.

- Key figures around 1430 GMT -

New York - Dow: DOWN less than 0.1 percent at 38,638.28 points

New York - S&P 500: FLAT at 5,025.94

New York - Nasdaq Composite: DOWN less than 0.1 percent at 15,977.97

London - FTSE 100: FLAT at 7,571.29

Paris - CAC 40: UP 0.4 percent at 7,675.47

Frankfurt - DAX: UP 0.3 percent at 16,982.96

EURO STOXX 50: UP 0.4 percent at 4,733.10

Tokyo - Nikkei 225: Closed for holiday

Hong Kong - Hang Seng Index: Closed for holiday

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.0768 from $1.0789 on Friday

Dollar/yen: UP at 149.28 yen from 149.26 yen

Pound/dollar: DOWN at $1.2617 from $1.2631

Euro/pound: DOWN at 85.34 pence from 85.40 pence

West Texas Intermediate: DOWN 0.4 percent at $76.50 per barrel

Brent North Sea Crude: DOWN 0.7 percent at $81.61 per barrel