The Dow closed nearly 0.3% higher in a choppy session on Tuesday, while the S&P 500 finished muted and Nasdaq 100 dropped by 0.4%. Investors reassessed the outlook for monetary policy ahead of today’s CPI report and earnings season kicking off. Meantime, European shares closed at their highest levels in one month yesterday, with the Euro Stoxx 50 gaining 0.5% to hit its highest level since November 2021, as investors hoped that interest rates would soon peak and come down later this year after a report by the IMF suggested the current higher rates were likely to be temporary. 

Summary as at 12.04.2023 

  • Asian equities markets were mixed on Wednesday as caution dominated sentiment ahead of the release of a key US inflation report that could influence the Federal Reserve’s interest rate decision in May. Investors also digested a raft of economic data in the Asia-Pacific region, including the South Korean unemployment rate and the Japanese producer price index. Shares advanced in Australia, Japan and mainland China, while retreating in South Korea and Hong Kong. 
  • European shares are set for muted trading following in the footsteps of US equity futures as investors await US inflation data that may shed light on the Fed’s next policy move. 
  • Oil prices moved little in early Asian trade this morning, sticking to near one-month highs as markets awaited fresh cues from US inflation data due later in the day, with the focus also turning to a potential build in US crude inventories. Crude prices rallied on Tuesday amid growing hopes that the US Federal Reserve will taper its hawkish stance, while a recent supply cut by OPEC+ continued to provide support. 
  • The IMF yesterday revised its global growth forecasts lower to 2.8% from 2.9% for 2023 and to 3% from 3.1% for 2024. The US economy is forecasted to grow 1.6% in 2023, slightly higher that the 1.4% seen in January; China 5.2%, and the Euro Area 0.8%. However, the GDP in Germany is expected to fall 0.1%, compared to early projections of a 0.1% rise, and the British economy will likely shrink 0.3%, compared to a 0.6% drop seen in January. Meanwhile, global inflation is seen decreasing to 7% this year from 8.7% in 2022 on the back of lower commodity prices but core CPI is likely to decline more slowly. 
  • New York Fed President John Williams said Fed officials still have more work to do, while Chicago Fed President Austan Goolsbee, who votes on monetary policy decisions this year, instead called for “prudence and patience”, the first official to suggest policymakers may need to hold off on further hikes for now. Fresh data is due today on consumer prices, which economists forecast rose 5.6% from a year earlier, excluding food and energy prices, roughly unchanged from the previous month. 
  • Moderna shares fell by around 3% yesterday after its first flu vaccine candidate did not meet the criteria for early success during the second part of a clinical trial. The Data and Safety Monitoring Board didn’t identify any safety concerns and recommended Moderna continue the clinical study with efficacy follow-up toward the next analysis.