US equity futures under pressure ahead of inflation data

US equity futures started off a data-heavy week on the backfoot before a key report on US inflation

By Ahmed Azzam | @3zzamous | 11 March 2024

Market close
  • China's CPI grows due to Lunar New Year, contrasting PPI trends

  • Yen extends rise on bets on end to negative rates

Beginning a week rich in data, US equity futures took a cautious stance, reflecting the market's anticipation of the upcoming Consumer Price Index (CPI) data. This Tuesday's report is pivotal, potentially influencing the Federal Reserve's direction towards more lenient policies.

Recent dovish remarks from officials and strong job data have not dampened the market's expectation for a rate reduction by June. However, an unexpected rise in inflation could challenge the recent rallies, especially since this CPI report is critical ahead of the Fed's March 20 gathering.

China’s CPI turned positive

China's CPI witnessed its first yearly growth in six months this February, largely fueled by the Lunar New Year's demand spike. Surpassing expectations, the CPI grew by 0.7% year-on-year, a marked recovery from previous declines.

This rebound reflects the seasonal dynamics impacting China's economy, with notable rises in food prices during the celebrations. However, the Producer Price Index (PPI) presented a contrasting picture, deepening into deflation, and revealing the complexity of China's economic conditions.

Japan edges away from recession

Japan's latest GDP figures bring a sigh of relief, showing a slender growth and steering clear of a recession scare. The final quarter's data was positively revised, driven by a notable uptick in capital investment, although consumer spending showed weaker figures.

Amidst these economic developments, the Bank of Japan remains undeterred in its consideration for an interest rate increase, closely watching the ongoing wage negotiations for further economic cues.