(Bloomberg) — Global equities are set for a fresh record after a big tech-led rally in US gauges, with investors awaiting key inflation data for clues on the Federal Reserve’s policy.

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European and US stocks futures ticked higher, while the MSCI All Country World Index extended its longest run since January. In the run-up to US consumer price index data, the S&P 500 shrugged off Jerome Powell’s signals that interest rates will be higher for longer and a mixed reading on producer inflation.

“Market sentiment hinges on tonight’s US CPI report,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “While promising, if it were to occur and represent a more than three-year low for core CPI, a greater downside surprise would be required to dispel fears about sticky and re-anchored inflation.”

A gauge for benchmarks in Asia gained after closing at a two-year high Tuesday, with Taiwan Semiconductor Manufacturing Co. leading the advance. Shares in Japan ended little changed, while those in mainland China slipped. Hong Kong markets are closed for a holiday.

The offshore yuan edged higher, mirroring gains in other China-economy sensitive currencies including the Australian dollar and Thai baht, following a Bloomberg report that the government is considering a proposal to buy millions of unsold homes in an attempt to salvage the beleaguered property market.

Tencent Holdings Ltd.’s American Depositary Receipts surged after the company’s revenue beat estimates in results reported late Tuesday, while Alibaba Group Holding Ltd.’s slid on a profit plunge, highlighting the growing divergence between China’s twin Internet powerhouses. Elsewhere, shares of Hon Hai Precision Industry Co. dropped after reporting a weaker-than-expected profit as demand for iPhones remained sluggish in China.

In the corporate world, Sony Group Corp.’s shares climbed as investors rewarded its mid-term plan and shareholder return policy after the company announced its quarterly earnings.

Tops Estimates

A Bloomberg dollar index was flat as US 10-year Treasury yields were little changed Wednesday after falling five basis points to 4.44% in the previous session, as traders positioned for a sharp drop in yields in the aftermath of the PPI print.

US producer prices climbed in April by more than projected, though key components that feed into the Fed’s preferred inflation gauge were more muted. Several categories in the PPI report that are used to calculate the personal consumption expenditures price index eased.

“A more granular look suggests the components that feed into PCE inflation sent mixed signals,” said Krishna Guha at Evercore. “This means that the burden largely remains on CPI.”

Underlying US CPI probably moderated in April for the first time in six months, offering some hope that price pressures will start to ease again. Compared with April 2023, the core CPI is projected to rise 3.6%. While the annual increase would be the smallest in three years, it would still be too high to warrant rate cuts.

“Investors are expecting inflation to fall in April,” said Anthony Saglimbene at Ameriprise. “Even if the decline is slight, markets are looking for further evidence that the downward trend in inflation remains intact and, importantly, is not in the process of reversing course higher.”

A survey conducted by 22V Research showed 49% of investors expect the market reaction to the CPI report to be “risk-on” — while only 27% said “risk-off.”

In commodities, oil advanced Wednesday after an industry report showed shrinking US stockpiles, and traders looked ahead to a report from the International Energy Agency that’ll shed light on market balances into the second half. Gold steadied after rising almost 1% on Tuesday.

Key events this week:

  • Eurozone industrial production, GDP, Wednesday

  • US CPI, retail sales, business inventories, empire manufacturing, Wednesday

  • Minneapolis Fed President Neel Kashkari speaks, Wednesday

  • Japan GDP, industrial production, Thursday

  • US housing starts, initial jobless claims, industrial production, Thursday

  • Philadelphia Fed President Patrick Harker speaks, Thursday

  • Cleveland Fed President Loretta Mester speaks, Thursday

  • Atlanta Fed President Raphael Bostic speaks, Thursday

  • China property prices, retail sales, industrial production, Friday

  • Eurozone CPI, Friday

  • US Conf. Board leading index, Friday

Some of the main moves in markets:


  • S&P 500 futures were little changed as of 6:54 a.m. London time

  • Hang Seng futures were little changed

  • Japan’s Topix rose 0.1%

  • Australia’s S&P/ASX 200 rose 0.4%

  • The Shanghai Composite fell 0.5%

  • Euro Stoxx 50 futures rose 0.2%

  • Nasdaq 100 futures were little changed

  • Australia’s S&P/ASX 200 rose 0.4%


  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0825

  • The Japanese yen was little changed at 156.33 per dollar

  • The offshore yuan rose 0.2% to 7.2256 per dollar

  • The Australian dollar rose 0.2% to $0.6643

  • The British pound was little changed at $1.2595


  • Bitcoin rose 0.5% to $61,882.38

  • Ether rose 0.5% to $2,904.42


  • The yield on 10-year Treasuries was little changed at 4.44%

  • Japan’s 10-year yield was little changed at 0.955%

  • Australia’s 10-year yield was little changed at 4.32%


This story was produced with the assistance of Bloomberg Automation.

–With assistance from Abhishek Vishnoi.

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