MARKET WRAPS
Watch For:
Germany unemployment, CPI data for Germany, Bavaria, North Rhine Westphalia, Brandenburg, Hesse, Baden-Wuerttemberg, Saxony; ; France CPI, consumer spending; U.K. money and credit; trading updates from Schroders, London Stock Exchange Group, IAG, Saint-Gobain, Veolia Environnement, Clariant, Ocado Group, Haleon, CRH, NN Group, Impala Platinum, Leonardo, Weir Group, Serco Group, ASR Nederland, Howden Joinery Group, Cellnex Telecom, MTU Aero Engines
Opening Call:
Stock futures were broadly higher early Thursday ahead of the release of U.S. January PCE inflation data. In Asia, stock benchmarks were mixed; Treasury yields were barely changed; the dollar weakened; oil futures declined and gold gained
Equities:
European stock futures were tracking higher as investors brace for the release of the Fed's preferred inflation gauge and as the earnings season continues.
"Coming into this year, a lot of people thought the Fed would be cutting pretty quickly and often," said Chris Zaccarelli, chief investment office at Independent Advisor Alliance. "You got one data point, which made people start worrying about inflation again."
Zaccarelli said he's waiting to see if Thursday's personal-consumption expenditures price index also confirms inflation edging higher.
Navellier & Associates founder Louis Navellier said that stocks trading lower and bond prices rising could be related to month-end rebalancing.
After the PCE data, it's likely the upward trend seen in the first two months will continue, he reckoned.
Forex:
The dollar weakened ahead of the U.S. January PCE inflation data due out later..
The latest paring back of Fed rate-cut expectations for this year has so far done little to boost USD, FX strategists at NAB Markets Research said.
This leaves the greenback vulnerable to any downside inflation or economic activity data surprises, the strategists added.
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JPY strengthened early Thursday after BOJ policy board member Takata's comments.
In a speech, Takata said the Japanese central bank should begin discussing details of a potential exit from its ultraeasy monetary policy.
Bonds:
Treasury yields were little changed in Asia following a modest downward revision to a reading on fourth-quarter U.S. economic growth.
Market reactions to the second GDP release were muted as investors await PCE inflation data to assess whether inflation is on a solid track to its 2% target, said Morgane Delledonne, Global X's head of investment strategy in Europe.
Fed-funds futures traders were pricing in a 97.5% probability that the Fed will leave interest rates unchanged at between 5.25% and 5.5% on March 20, according to the CME FedWatch Tool. The chance of at least a 25-basis-point rate cut by June was seen at 63.6%.
Energy:
Oil futures were lower after U.S. government data showed a fifth consecutive weekly climb in domestic commercial-crude inventories.
A report said major oil producers in OPEC+ may consider extending their voluntary production cuts into the second quarter and analysts pointed out signs of tighter global supplies, likely providing some support to the market.
Overall, crude prices have been searching for direction as several factors weigh on the market, said Tariq Zahir, managing member at Tyche Capital Advisors.
Still, "with summer driving season and supply cuts still being implemented, and the risk of a wider conflict in the Middle East, we feel the risk is to the upside in prices for crude oil in the days and weeks ahead," he said.
Metals:
The precious metal gained, but was moving in a tight range as investors await key inflation data and comments from Fed members to get a better idea on the timing of the first interest-rate cut, ICICIdirect analysts said.
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Aluminum was flat with market sentiment for the metal dented by forecasts from China, ANZ said.
Chinese state-backed research firm Beijing Antaike Information Development said recently that it forecasts Chinese demand for aluminum to rise only 1.7% this year.
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Iron ore prices were lower as concerns over China's weak steel demand continues to weigh on market sentiment.
China is entering its peak construction period, but there is little sign that Chinese steelmakers were ramping up iron ore production, ANZ Research analysts said.
TODAY'S TOP HEADLINES
Fed's Williams said he's 'very focused' on getting inflation back to target
Like a lunar rocket, inflation has shot up and come back down but has yet to land safely, New York Fed President John Williams said Wednesday.
"While we've seen great progress toward achieving our goals, the journey is not yet over, and I am very focused on making sure we complete this mission successfully," Williams said in a speech at an aviation museum on Long Island.
Hotter PCE inflation report to be another 'bump' in the road for the Fed
Getting U.S. inflation back down to low prepandemic levels is going to hit some "bumps," in the road, Federal Reserve officials say. Expect another bump on Thursday.
The PCE index, the Fed's favorite inflation gauge , is expected to show a bigger increase in prices in January than the central bank is comfortable with. The report follows on the heels of sharper increases in consumer and wholesale prices last month that raises doubts about the path of inflation.
Fed's Collins wants to see inflation cool in more categories before supporting rate cuts
The slowing of inflation must broaden out to other sectors before it will be appropriate to ease policy, Boston Fed President Susan Collins said Wednesday.
"What would I need to see in the data to determine when it will be appropriate to ease policy?" Collins asked in a speech at the Tuck School of Business at Dartmouth College.
U.S. Monetary Policy Gets Cloudier as Biden, Trump Showdown Approaches
The presidential election is making U.S. monetary policy harder to predict.
Surprising economic data in recent months scrambled forecasts and investors' bets about when the Federal Reserve will start to cut interest rates. The outlook gets murkier as political campaigning intensifies and is expected to reach a fever pitch in the second half of the year.
Anheuser-Busch, Teamsters Avert Strike With Tentative Deal
Anheuser-Busch InBev and the Teamsters reached a tentative agreement on a new labor contract Wednesday, avoiding a potential strike of thousands of employees at breweries across the U.S.
The International Brotherhood of Teamsters, which represents about 5,000 brewery workers, had previously threatened to strike March 1 if a deal wasn't reached by Feb. 29, when the current union contract expires. Members had been seeking pay increases and a guarantee that Anheuser-Busch wouldn't close breweries.
XPeng, Volkswagen Expand Partnership to Accelerate EV Development
XPeng and Volkswagen signed a new agreement to collaborate on software and sourcing, building on an existing partnership as the German automaker seeks to expedite its electric-vehicle development.
The carmakers entered into an agreement covering strategic technical collaboration and joint sourcing to accelerate EV development, Chinese EV maker XPeng said in a statement Thursday.
Axel Springer, Other European Media Sue Google for $2.3 Billion
Alphabet-owned Google was hit with a EUR2.1 billion ($2.28 billion) lawsuit by a group of European media organizations, who are alleging Google's position in the advertising market harmed their business.
The coalition of more than 30 European media organizations from 17 countries, which includes media giant Axel Springer, is alleging they incurred losses from less competition in the advertising technology market. The suit claims the media companies would have had higher revenue and lower advertising fees without Google's dominant position.
Ukraine's Other Battle for Survival: Keeping Companies in Business
Igor Liski wants to replace Ukraine's broken windows.
Two years after Russia's large-scale invasion, Ukraine is littered with shards of glass, and Moscow's attacks blow out more panes endlessly.
SEC Investigating Whether OpenAI Investors Were Misled
The Securities and Exchange Commission is scrutinizing internal communications by OpenAI Chief Executive Sam Altman as part of an investigation into whether the company's investors were misled.
The regulator, whose probe hasn't previously been reported, has been seeking internal records from current and former OpenAI officials and directors, and sent a subpoena to OpenAI in December, according to people familiar with the matter. That followed the OpenAI board's decision in November to fire Altman as CEO and oust him from the board. At the time, directors said Altman hadn't been "consistently candid in his communications," but didn't elaborate.
Apple Shareholders Reject AI Report Proposal
Apple shareholders rejected a proposal that would require the company to disclose its activities with artificial intelligence.
The proposal, brought by AFL-CIO Equity Index Funds, would have required the company to generate a report on its use of AI in operations and to disclose any ethical guidelines adopted by the company.
Paramount puts up a surprise adjusted profit, as higher streaming prices boost revenue
Shares of Paramount Global Inc. were up after hours on Wednesday after the media and entertainment giant reported a surprise adjusted quarterly profit, as higher subscription prices fattened sales for its Paramount+ streaming platform.
Adjusted for impairments and restructuring, the company - which also oversees CBS, Comedy Central and Pluto TV - reported a per-share profit of 4 cents, better than FactSet estimates for a 1 cent per-share loss. Revenue fell 6% to $7.64 billion, worse than expectations for $7.83 billion.
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Expected Major Events for Thursday
00:01/UK: Jan UK monthly automotive manufacturing figures
00:01/UK: Jan Zoopla House Price Index
(MORE TO FOLLOW) Dow Jones Newswires
02-29-24 0015ET
