A look at the day ahead in markets from Sujata Rao
Markets are enjoying a respite of sorts. With 10-year Treasury yields down five basis points from recent highs, the Nasdaq has managed to rebound around 10% from late-January troughs. Europe’s STOXX 600 is opening higher after bumper earnings propelled the index to its best day in two months.
Meanwhile Walt Disney Co. assuaged fears, raised after Netflix’s lacklustre earnings report, that the entertainment streaming sector faces a reckoning as the pandemic ends. Disney shares rose 8% after-hours thanks to a 34% revenue jump and predictions of stronger subscriber growth.
Wall Street futures signal a weaker open however as the release of U.S. January inflation data comes into view. CPI is forecast at a four-decade high of 7.3% but many hope the number will show the economy is starting to work its way through supply glitches and labour shortages.
More than five quarter-point Fed interest rate hikes are currently priced by year-end but the data could swing those bets either way.
Bond market signals have been reassuring for tech investors. Thursday’s 10-year Treasury auction saw the strongest demand since May 2020 in a sign that buyers will rush to grab higher yields, potentially capping their rise. Let’s see what happens at a 30-year auction later in the day.
Similarly, Spain on Wednesday took 60 billion euros in bids for a 7 billion-euro 30-year issue(Spanish 10-year yields are up some 35 bps this month).
Key developments that should provide more direction to markets on Thursday:
-Credit Suisse ends torrid year with $2.2 bln Q4 loss; SocGen quadruples profit
-Unilever warns of high inflation, rules out big M&A; AstraZeneca sees 2022 growth but COVID boost fades
-UK RICS housing survey
-Swedish Central Bank announces interest rate decision 0830 GMT
-ECB board member Philip Lane speaks 1315 GMT
-Bank of England Governor Andrew Bailey speaks 2015 GMT.
-U.S CPI/weekly jobless figures
-US 30-year bond auction
-U.S. earnings: Linde, Twitter, Coca-Cola, Moody, Philip Morris, Kellogg, Expedia, Western Union, Mohawk, First Energy
-Emerging market central banks: Indonesia, Mexico, Peru, Serbia,
-South Africa President Ramaphose to deliver state of the nation address
(Reporting by Sujata Rao; Editing by Rachel Armstrong)