Shares Edge Higher With Traders on Inflation Watch: Markets Wrap

(Bloomberg) — Shares edged higher as traders parsed the latest earnings news and looked forward to a key US inflation print later for clues on the outlook for interest-rate cuts.

Europe’s Stoxx 600 posted modest gains, boosted by a 13% surge in Heineken NV as the brewer reported strong demand for premium brands. An index of Asian shares advanced, while US equity futures contracts were steady.

US inflation likely remained stubborn last month, based on economists’ estimates, backing the Federal Reserve’s patient approach to lowering interest rates. Chair Jerome Powell told Congress Tuesday that the Fed doesn’t need to rush easing, indicating how the economy remained strong.

Treasuries steadied after tumbling across the curve Tuesday as Powell signaled the Fed’s patience on further rate cuts. An index of dollar strength rose. 

“The market is taking Powell’s comments in stride,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc in Hong Kong. “Few believed that Fed was quick to the trigger on further rate cuts, though the door remains open for some easing later in the year.” 

American inflation figures due shortly before the second half of Powell’s two-day testimony marathon are forecast to show the consumer price index excluding food and energy rose 0.3% in January for the fifth time in the last six months.

Money markets continued to fully price in just one quarter-point rate cut by the Fed this year, by September. In December, two 2025 cuts were priced in. A strong January jobs report released Friday prompted reassessment of the policy outlook, and today’s data could do the same.

Back in Asia, yields on Japanese 5-year bond climbed to 1% for the first time since 2008, and the yen declined for a third day on concerns over US President Donald Trump’s trade-tariff measures.

The yen is on track for its longest losing streak in more than a month amid heightened concerns Japan may be included in Trump’s tariff plans. The currency was the worst performer among its Group-of-10 peers on Wednesday. The Japanese government asked Trump on Wednesday to exempt the nation’s companies from his fresh tariffs. 

“There is a genuine risk that Japan may be hit and this can complicate the near term outlook for yen,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. in Singapore. 

The technology theme continued to buoy stocks in China and Hong Kong. Alibaba Group Holding Ltd. rose as much as 8.6%, the most since September 2024, after The Information reported that Apple Inc. is partnering with the company to bring AI features to products in China. 

DeepSeek news has also helped lift the Hang Seng Index with UBS strategists including James Wang saying that the rally in Chinese stocks spurred by DeepSeek’s artificial intelligence app may be “less than halfway” done. Wall Street strategists from Morgan Stanley and JPMorgan Chase & Co. have also echoed this view. 

In commodities, oil edged lower after an industry report indicated a large increase in US crude stockpiles. Gold was down for a second day after a volatile trading in its previous session saw it surge to a fresh peak above $2,942.

Key events this week:

• US CPI, Wednesday
• Fed Chair Jerome Powell testifies to House Financial Services panel, Wednesday
• Fed’s Raphael Bostic and Christopher Waller speak, Wednesday
• Eurozone industrial production, Thursday
• US initial jobless claims, PPI, Thursday
• Eurozone GDP, Friday
• US retail sales, industrial production, business inventories, Friday
• Fed’s Lorie Logan speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 8:18 a.m. London time
• S&P 500 futures were little changed
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index rose 0.3%
• The MSCI Emerging Markets Index rose 0.6%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.2% to $1.0377
• The Japanese yen fell 0.7% to 153.63 per dollar
• The offshore yuan was little changed at 7.3139 per dollar
• The British pound rose 0.1% to $1.2461

Cryptocurrencies

• Bitcoin fell 0.2% to $96,182.14
• Ether rose 0.4% to $2,632.2

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.55%
• Germany’s 10-year yield advanced two basis points to 2.45%
• Britain’s 10-year yield advanced one basis point to 4.52%

Commodities

• Brent crude fell 0.8% to $76.40 a barrel
• Spot gold fell 0.3% to $2,890.32 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Toby Alder.

©2025 Bloomberg L.P.