Stock prices dipped as the dollar strengthened on Thursday, ahead of U.S. inflation data that will influence the Federal Reserve’s interest rate plans.
Stella Qiu and Alun John for Reuters:
Sky-high inflation has caused the Fed to raise rates aggressively this year, a process that has boosted the dollar and caused U.S. Treasuries and shares around the world to sell off sharply.
The release of U.S. CPI data, due at 1330 GMT, is the main event of the day for markets as investors try to position themselves based on when and at what level they think U.S. interest rates will peak.
Markets are currently pricing in a 54% chance of a 50-basis-point increase at the Fed’s December meeting, according to CME’s Fedwatch tool, with still a good chance of a 75-basis-point rise. Expectations for future meetings are divided.
The U.S. dollar firmed on Thursday, with the euro dipping 0.6% to $0.9947 while the yen was steady 146.45 per dollar…
[Meanwhile], Republicans were edging closer to securing a majority in the U.S. House of Representatives while control of the Senate hung in the balance.
Another factor for markets is that China is again grappling with a COVID-19 surge, with the southern metropolis of Guangzhou reporting thousands of cases. Apple Inc supplier and iPhone assembler Foxconn said on Thursday it expected flattish revenue in the fourth quarter, as the company grapples with COVID curbs at a major factory in China’s Zhengzhou industrial hub.
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