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Stocks soar on key data, Fed decision in focus: Markets over


(Bloomberg) — US stocks rallied at the start of an important week for monetary policy decisions from the Federal Reserve, the European Central Bank and a host of peer-to-peer banks.

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The S&P 500 is up more than 1%. The tech-heavy Nasdaq 100 also rose after swinging earlier in the session. Yields on US Treasuries rose, with 10-year yields around 3.61%. The dollar appreciates.

All eyes will be on the US consumer price index read on Tuesday, which is expected to show prices, while remaining high, continuing to decelerate. A softening CPI print would justify the Fed’s expected half-point move on Wednesday and shed light on whether the market can expect a rate cut by the end of 2023. in a period of time.

Steve Sosnick, chief strategist at Interactive Brokers, said: “We need to stay optimistic — we’ve just bounced back to pre-passionate popularity late Friday. “And again, we got out of 100 days on SPX. There is not enough selling pressure to push us below that level. But it feels like there is some optimism about CPI.”

Read: 24 hours of spike to end the year against inflation

The S&P 500 posted its best-ever post-CPI day in November after the inflation print arrived more slowly than expected. According to an analysis from the market maker, the US equity benchmark could rise as much as 5.5% on Tuesday – which would make for the best CPI day ever – if headline inflation is 0.2 percentage points lower than the Selector’s annual estimate.

However, disparities in economic prospects across regions of the world, from the resurgence of the Covid-19 outbreak in China to energy volatility in Europe, have hampered risk sentiment.

Following the Fed, the ECB will announce its rate decision on Thursday and may also choose to raise it by 50 basis points. Markets will also debate decisions from the Bank of England and monetary authorities in Mexico, Norway, the Philippines, Switzerland and Taiwan.

This week’s main events:

  • US CPI, Tuesday

  • FOMC rate decision and Fed Chairman’s press conference, Wednesday

  • China medium-term loans, real estate investment, retail, industrial production, unemployment surveyed, Thursday

  • ECB interest rate decision and ECB President Lagarde press conference, Thursday

  • Rate decision for BOE UK, Mexico, Norway, Philippines, Switzerland, Taiwan, Thursday

  • US cross-border investment, business inventories, manufacturing empire, retail sales, initial jobless claims, industrial production, Thursday

  • Eurozone S&P Global PMI, CPI, Friday

Some key moves in the market:

share

  • S&P 500 up 1% at 3:09 p.m. New York time

  • Nasdaq 100 rose 0.8%

  • The Dow Jones Industrial Average rose 1.2%

  • The MSCI World Index fell 0.1%.

currency

  • The Bloomberg Dollar Spot Index is up 0.2%

  • The euro fell 0.1% to $1.0527

  • British Pound was little changed at $1.2262

  • The Japanese yen fell 0.9% to 137.73 to the dollar

electronic money

  • Bitcoin drops 0.3% to $17,065.25

  • Ether drops 0.8% to $1,254.78

bonds

  • Yields on 10-year Treasuries rose 4 basis points to 3.61%

  • German 10-year yield was little changed at 1.94%

  • UK 10-year yield rose two basis points to 3.20%

Goods

  • West Texas Intermediate crude rose 3% to $73.13 a barrel

  • Gold futures fell 1% to $1,793 an ounce

This story was made possible with support from Bloomberg Automation.

–With support from Srinivasan Sivabalan.

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