(CercleFinance.com) – Wall Street is expected to fall on Friday morning, the rather reassuring figures for import prices having not dispelled fears of persistent inflation which would encourage the Fed to act.
Benchmark futures so far are signaling an opening down 0.4% to 0.6%, continuing yesterday’s bearish move.
The Labor Department announced this morning that US import prices fell 0.2% in January, mainly driven by gasoline prices, after falling 0.1% in December 2022.
If this decline reflects a certain easing of inflationary pressures, the statistics come after the publication, in recent days, of a whole series of indicators that have confused the cards for investors.
Yesterday, US equity markets lost ground following the announcement of a more than expected rise in producer prices, confirming that US inflation is only coming down very slowly.
On Tuesday, Wall Street had already been weighed down by the publication of consumer price figures dispelling the prospect of a rate cut from the US Federal Reserve.
All these figures cast doubt on the scenario of inflation being completely under control in the United States and on the fact that the fight against rising prices would already be won.
With inflationary pressures still significant, in particular due to full employment in the labor market, the Fed should be confirmed in its desire to maintain a firm stance on inflation, and therefore a restrictive monetary policy.
The publication of the import price statistics has also boosted the yields of Treasuries this morning, with a 10-year paper which has returned beyond 3.90%, a level not seen since last November.
Investors are now waiting to learn, shortly after the opening, of the index of leading indicators, which should have continued to decline in January.
For six months, this barometer of activity has not ceased to evoke the prospect of an imminent entry into recession of the American economy, a scenario perpetually denied by the vigor of the labor market.
‘A recession is not characterized above all by a decline in employment. Nothing like this happened’, recall the teams of Oddo BHF.
The session is also likely to be more volatile than usual on this so-called ‘three witches’ day, marked by the expiry of several futures contracts and options on indices and equities.
At the opening in New York, the European stock markets were moving into negative territory, with a decline of around 0.3% for the FTSE 100 index in London and a decline of more than 0.8%. for the pan-European Euro STOXX 50 index.
Copyright (c) 2023 CercleFinance.com. All rights reserved.