Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. Inflation, OPEC/EIA Reports, Sony's Epic Deal - What's Moving Markets

Economy Apr 12, 2022 20:58
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters

By Geoffrey Smith 

Investing.com -- U.S. inflation is set to hit its highest level in 40 years in March, raising the pressure on the Federal Reserve to tighten monetary policy. China's government head calls for accelerated stimulus to cushion the impact of spreading Covid lockdowns. German economic sentiment darkens as Europe braces for a fresh Russian onslaught in Ukraine, and OPEC and the U.S. government both publish regular updates on the state of the oil market. Sony (NYSE:SONY) throws money at videogames publisher Epic, and CarMax (NYSE:KMX) reports earnings. Here's what you need to know in financial markets on Tuesday, 12th April

1. Inflation set to hit new 40-year high 

U.S. inflation is set to hit another 40-year high later, as surging energy prices, disrupted supply chains and a tight labor market combine to form a powerful cocktail. The benchmark 10-Year Treasury yield hit a new three-year high of 2.80% overnight in anticipation.

Analysts expect the headline annual rate of inflation to hit 8.4%, from 7.9% in February. The core rate is expected to rise to 6.6% from 6.4%. Base effects mean that this could be the month that the annual rate peaks. For that reason, it will be important to keep an eye on the month-on-month rates to judge the strength of current price dynamics.

Lael Brainard, Joe Biden’s nominee for the vice-chair position at the Federal Reserve, will speak at 12:10 PM ET (1610 GMT), while Richmond Fed President Tom Barkin will give his two cents’ worth at 5:30 PM ET.

2. Chinese Premier calls for stimulus to cushion Covid blow

China’s Prime Minister Li Keqiang issued his third warning about the growth outlook in less than a week and called for planned stimulus measures to be accelerated.

Authorities should “add a sense of urgency” when implementing existing policies, Bloomberg reported Li as saying.

There’s still no end in sight to the lockdowns that are affecting Shanghai, China’s biggest financial hub and a major manufacturing sector of 25 million people. The EU Chamber of Commerce estimates that half of its German members’ supply chains are either “completely” or “severely” disrupted as a result of lockdowns that – according to Nomura economists – now cover nearly 400 million people in varying degrees of severity.

3. Stocks set to open mixed; CarMax, Sony in focus

U.S. stocks are expected to open mixed later, with traders loath to take many risks in premarket ahead of the CPI numbers at 8:30 AM ET.

By 6:15 AM ET, Dow Jones futures were down 14 points, or less than 0.1%, while S&P 500 futures were up by less than 0.1% and Nasdaq 100 futures were up 0.2%. The Nasdaq had underperformed again on Monday, falling over 2% as fears about rising interest rates again strained the valuation models underpinning many technology stocks.

Stocks likely to be in focus later include CarMax, whose quarterly earnings come at a time when the market for used cars is starting to show signs of softening, and Etsy (NASDAQ:ETSY), which is facing a sellers’ strike after it said it wanted to raise its fees.

Sony (NYSE:SONY) ADRs and videogames makers may also get attention after the Japanese company invested in Fortnite publisher Epic Games at a valuation of nearly $32 billion.

4. European data worsen as Ukraine braces for Russian attack

The economic data in Europe continues to worsen against the backdrop of a war that shows no sign of ending, and every sign of intensifying in the near future.

The German ZEW Economic Sentiment index fell again to its lowest since March 2020, with the think-tank warning that the prospect of stagflation over the next six months “remains real”. German consumer inflation was confirmed at 7.3% in March.

In the U.K. meanwhile, the monthly drop in those claiming unemployment benefits was the smallest in six months, while employment in the three months through March grew only 10,000, well below forecasts.

Emerging markets continued to throw up more dramatic economic news, however, with Sri Lanka declaring a halt to foreign debt payments.

5. Oil rebounds ahead of OPEC and EIA reports; API inventories due

Crude oil prices bounced back from their recent China-driven selloff, with Brent crude trading back above $101 a barrel and U.S. crude futures rising 3.3% to $97.34 a barrel.

There’s no sign of relief coming from the war in Ukraine, where the government has warned it expects a fresh Russian onslaught in the east of the country. Austria’s Chancellor Karl Nehammer said he had “no positive impression” for peace after meeting with Russia’s Vladimir Putin on Monday.

The Organization of the Petroleum Exporting Countries will update its forecasts for global supply and demand in its monthly report later, while the U.S. will release its Short-Term Energy Outlook at 12 PM ET.

The American Petroleum Institute will release its weekly assessment of U.S. crude and product stocks at 4:30 PM as usual.

U.S. Inflation, OPEC/EIA Reports, Sony's Epic Deal - What's Moving Markets
 

Related Articles

Top 5 Things to Watch in Markets in the Week Ahead
Top 5 Things to Watch in Markets in the Week Ahead By Investing.com - Jun 26, 2022

By Noreen Burke Investing.com -- The European Central Bank will hold its annual retreat in Portugal, where President Christine Lagarde, along with Federal Reserve Chair Jerome...

Take Five: Goodbye turbulent H1
Take Five: Goodbye turbulent H1 By Reuters - Jun 25, 2022

Angst is running high over global recession risks as the year's mid-point approaches. So economic data and central bank talk will bear watching more than usual, and there's plenty...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email