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U.S. equity index futures rally: Nasdaq 100 up ~0.9%
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U.S. Mar CPI MM YY < ests; core MM YY in-line with ests
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Euro STOXX 600 index up ~0.6%
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Dollar down; gold, crude, bitcoin up
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U.S. 10-Year Treasury yield falls to ~3.36%
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U.S. STOCK FUTURES PUFF UP AS HEADLINE CPI COOLS (0900 EDT/1300 GMT) U.S. equity index futures have strengthened in the wake of the release of the latest data on U.S. inflation. The March CPI on a month-over-month and year-over-year basis came in below estimates, as well as below the prior month's readings. The month-over-month core number and year-over-year print were in-line with estimates:
According to the CME's FedWatch Tool, the probability of a 25 basis point rate hike at the May 2-3 FOMC meeting is now 67% from 76% just before the numbers were released. There is now around a 33% chance that the FOMC will leave rates unchanged from around 24% prior to the data coming out. Indeed, the cooling headline numbers appear to be raising hopes that the Federal Reserve could hit pause on its interest rate hiking cycle soon. CME e-mini S&P 500 futures are gaining around 0.7%. The futures were just above flat in the moments before the numbers came out.
All S&P 500 sector SPDR ETFs are higher in premarket trade
with consumer discretionary and real estate posting the biggest gains. XLY is up 1.5%, while XLRE is rising
1.4%.
Regarding the inflation data, Quincy Krosby, chief global
strategist at LPL Financial in Charlotte, North Carolina, said,
"It was cooler than expectations by just a bit. Clearly the
inflationary pressures are moving in the right direction. The
initial reaction in the market was positive across the board.
You saw the futures market jump higher and the 2-year Treasury
yield moved lower on the release of this report."
Here is a premarket snapshot just shortly before 0900 EDT:
(Terence Gabriel, Caroline Valetkevitch)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
