US open: Futures point to a mixed start amid inflation caution

US stocks are heading for a mixed start in what is expected to be a quiet session. Caution dominates ahead of Thursday's CPI reading.

USA (2)

US futures

Dow futures -0.02% at 34610

S&P futures +0.2% at 4236

Nasdaq futures +0.66% at 13890

In Europe

FTSE +0.3% at 7103

Dax +0.03% at 15694

Euro Stoxx +0.3% at 4110

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Stocks mixed after Fastly outage, CPI in focus

US futures are set for a mixed start in what is expected to be a subdued session. Investors remain firmly fixated on Thursday’s inflation data. After the goldilocks jobs report on Friday, the rally has faded and concerns are starting to creep in over where inflation might be heading and what the Fed may do about it.

The tight trading ranges seen so far this month reflect the cautious mood in the market ahead of the inflation numbers. CPI is expected to continue climbing to 4.7% MoM in May.

Such as elevated figure will test the Fed’s resolve. Whilst the Fed reassure that this spike in inflation is temporary, policy makers will need to be out in their droves to calm the market. Delaying action or even inaction could cause economic disruption that the markets fear.

In corporate news Fastly will be in the spotlight after experiencing technical issues which are suspected to be behind an outage hitting global news websites such as FT, Bloomberg and the New York Times.

Where next for the Dow Jones?

The Dow Jones closed 0.3% lower on Monday and the futures are trading a few ticks lower today. However, the broad uptrend remains intact, with the index trading above its ascending trendline dating back to early May, on the 4 hour chart.  The overnight swing low found support on the trendline at 34450. Although a move below 34200 is needed to negate the near-term uptrend. On the upside, buyers could target 34850 the June high, before 35000 comes back into sight.

FX – USD edges higher, EUR digests mixed bag of data

The US Dollar advancing in quiet trade as it recovers from a two day selloff following the weaker than expected non farm payroll report. The softer number took some pressure off the Fed to taper support. Attention is now on Thursday’s CPI reading.

EUR/USD trades range bound as investors digest a mixed bag on the data front. Eurozone Q1 GDP was upwardly revised contracting -0.3% in the first three months of the year, less than the -0.6% from the second reading. However, German industrial production also unexpectedly declined 1% in April, down from 2.2% increase in March but well short of the 0.5% rise forecast.

GBP/USD  -0.2% at 1.4145

EUR/USD  -0.1% at 1.2178

Oil eases on demand concerns

Oil prices are extending losses for a second straight session as investors remain caught up on demand outlook concerns. Data yesterday revealed that Chinese oil imports dropped -14.6% YoY in May, to a 5 month low unnerving the markets.

Both benchmarks are trading around 1% lower, although the longer term bullish uptrend remains intact. Oil prices have rallied over 40% this year on expectations of strong demand in the second half of the year.

API crude stockpile data is due later.

US crude trades -0.1% at $68.51

Brent trades -0.1% at $70.72

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Looking ahead

15:00 JOLTS job openings

21:30 API Crude Oil Stockpile Data

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