(Bloomberg) — Stocks saw small moves as traders focused on key inflation data in Europe and the Federal Reserve’s preferred price growth measure for hints about the scope and timing of policy easing.
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The Stoxx 600 saw little change, posting a gain of 2.4% for the month. U.S. stock contracts fell after the S&P 500 fell on Thursday, driven by losses in the technology sector. The dollar and US government bonds remained stable.
The core PCE deflator, which the Fed prefers as a gauge of inflation, likely fell in April to its slowest monthly pace so far this year. In Europe, price data will help traders assess how much room policymakers have for rate cuts with the European Central Bank meeting next week.
Stock gains this month were fueled by the rally in the technology sector and Fed Chairman Jerome Powell’s dovish stance on interest rates in early May. That optimism has faded as the month has gone on, and Friday’s data could revive hopes for easing if there are signs of inflation returning to target.
Global bond markets are wobbling again as hopes for rate cuts fade
In emerging markets, the South African rand led declines among developing countries after falling more than 3% in three days. Investors are awaiting the final results of the national elections as they worry about the different variants a coalition could take and whether a market-friendly government will emerge.
Hope and fear grip South African markets as the coalition era dawns
Trump convicted
Elsewhere, a jury has found Donald Trump guilty of all 34 charges of falsifying company records during his hush-money trial, making him the first former US president to be convicted of crimes. With Trump set to be sentenced on July 11, the conviction creates a tricky legal and political path when he faces President Joe Biden as the presumptive Republican nominee in November.
“Expectations for a guilty verdict were somewhat priced into the markets,” said Paresh Upadhyaya, director of fixed income and currency strategy at Amundi Asset Management in Boston. “The bigger impact on markets could be if this guilty verdict starts to shift momentum from Trump to Biden.”
Trump Media & Technology Group was down 12% in extended trading.
Wall Street billionaires rush to support Trump, verdict be damned
Main events this week:
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Eurozone CPI, Friday
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US consumer income, spending, PCE deflator, Friday
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Raphael Bostic of the Fed will speak on Friday
Some of the major moves in the markets:
Shares
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The Stoxx Europe 600 was little changed at 8.55am London time
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S&P 500 futures fell 0.2%
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Nasdaq 100 futures fell 0.5%
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Futures on the Dow Jones Industrial Average were little changed
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The MSCI Asia Pacific Index was little changed
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The MSCI Emerging Markets Index fell 0.7%
Currencies
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro was little changed at $1.0823
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The Japanese yen fell 0.2% to 157.14 per dollar
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The offshore yuan fell 0.1% to 7.2618 per dollar
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The British pound fell 0.2% to $1.2705
Cryptocurrencies
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Bitcoin fell 0.6% to $68,092.45
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Ether fell 0.4% to $3,724.29
Bonds
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The yield on ten-year government bonds rose by one basis point to 4.56%
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The German ten-year yield rose by two basis points to 2.67%
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The British ten-year yield rose by two basis points to 4.37%
Raw materials
This story was produced with the help of Bloomberg Automation.
–With help from Matthew Burgess, Carter Johnson and Chiranjivi Chakraborty.
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