Stocks circle, bond yields rise with Thursday’s price data at point

NEW YORK, LONDON, Jan 10 (Reuters) – Trading in major Wall Street indices was volatile on Tuesday, with the S&P 500 swinging between red and green as Treasury yields rose as investors eagerly awaited the US inflation data due later in the week.

The U.S. dollar was little changed against the euro and other major currencies, hovering around its weakest level in seven months as investors position themselves ahead of December consumer price data due out on Thursday. .

U.S. Treasury yields rose as investors braced for how inflation figures could influence the Federal Reserve’s interest rate hike path as it prioritized its fight against a high inflation for decades.

The US Consumer Price Index (CPI) is expected to show December headline inflation at 6.5% vs. 7.1% in November.

“Generally, markets are waiting for Thursday’s CPI release for December. This will probably be the most important data point of the week and it will certainly give us some clarity on the direction of inflation,” Mona Mahajan said. , senior investment strategist at Edward Jones.

“We’re feeling a bit of sideways movement in the market today and we’ll likely continue to get it.”

The Dow Jones Industrial Average (.DJI) fell 4.1 points, or 0.01%, to 33,513.55, the S&P 500 (.SPX) lost 1.19 points, or 0.03%, to 3,890.9 and the Nasdaq Composite (.IXIC) added 6.78 points, or 0.06%, to 10,642.43.

The pan-European STOXX 600 index (.STOXX) lost 0.57% while the MSCI gauge of stocks across the world (.MIWD00000PUS) lost 0.19%, after hitting a more than 3-week high on Monday.

Signs of slowing wage inflation in the December US jobs report released on Friday provided some assurance that inflation has peaked.

However, with consumer price increases still well above the central bank’s 2% target, two Fed officials reiterated on Monday that interest rates will have to keep rising, regardless of bond prices. investors.

San Francisco Fed President Mary Daly told the Wall Street Journal she would be paying close attention to Thursday’s data and that 25 and 50 basis point hikes were options for her. Atlanta Fed President Raphael Bostic said his “baseline scenario” is not to cut rates this year or next.

On Tuesday, Fed Chairman Jerome Powell avoided talking about rate hikes during a speech in Sweden on Tuesday.

The dollar index rose 0.155%, with the euro up 0.01% at $1.0729.

The Japanese yen weakened 0.34% against the greenback to 132.31 to the dollar, even after data showed a faster recovery in inflation in Tokyo that could prompt the Bank of Japan to tighten monetary policy more quickly.

The pound was last at $1.2147, down 0.30% on the day.

In Treasuries, benchmark 10-year bonds rose 11.7 basis points to 3.634%, from 3.517% late Monday.

The 30-year bond last rose 11.6 basis points to 3.7658% from 3.65%. The 2-year note was the last to rise by 8 basis points to give 4.2786%, against 4.199%.

Oil prices were higher as commodity traders also awaited the data so they could assess the Federal Reserve’s rate hike plans and the potential impact on the economy and demand.

U.S. crude recently rose 0.76% to $75.20 a barrel and Brent to $80.09, up 0.55% on the day.

In precious metals, spot gold added 0.1% to $1,873.30 an ounce. US gold futures gained 0.11% to $1,874.80 an ounce.

Additional reporting by Sinéad Carew in New York, Amanda Cooper in London, Selena Li in Hong Kong; Editing by Muralikumar Anantharaman, Angus MacSwan Chizu Nomiyama, Alexandra Hudson

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