European stocks fell on Thursday, while US futures ticked higher as investors geared up for the release of a fresh batch of inflation data and monitored the results of the country’s midterm elections.
The regional Stoxx Europe 600 fell 0.1 per cent in early trading and London’s FTSE was flat. Contracts tracking Wall Street’s benchmark S&P 500 added 0.3 per cent while those tracking the tech-heavy Nasdaq 100 rose 0.4 per cent.
In the US on Wednesday, one day after polls closed, elections in multiple states were yet to be called, leaving control of both the Senate and House up in the air. However, analysts said the Republican party’s showing so far had already undermined pollster predictions of a “red wave” in both legislative chambers.
Traders were also looking ahead to the release of October’s US inflation data, with economists polled by Refinitiv expecting a 0.6 per cent month-on-month increase in consumer prices, slowing the annual rate to 8 per cent from 8.2 per cent.
A higher than expected reading would pile pressure on the US Federal Reserve to maintain its policy of aggressive interest rate rises to combat inflation. The central bank has delivered four consecutive rises of 0.75 percentage points this year to slow rising price growth.
Fed chair Jay Powell signalled earlier this month that the central bank would slow the pace of monetary tightening but arrive at a higher than expected terminal rate.
In government bond markets, the yield on the 2-year Treasury, which is particularly sensitive to interest rate moves, slipped 0.02 percentage points to 4.61 per cent. The yield on the 10-year Treasury fell 0.05 percentage points to 4.09 per cent. Yields fall when prices rise.
In Asia on Thursday, Japan’s Topix shed 0.7 per cent, the Hang Seng index in Hong Kong fell 1.7 per cent and China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 0.7 per cent.
In crypto markets, bitcoin rose 5 per cent to $16,660 a token after posting double-digit falls in response to the aborted rescue of Sam Bankman-Fried’s FTX exchange by rival Binance.
The collapse of the shortlived deal has stoked fears of further fallout for crypto assets, which have already been battered this year by the collapse of prominent groups in the sector, such as Three Arrows Capital and the lender Celsius Network. Bitcoin is down almost a quarter this week, with year-to-date losses of nearly two-thirds.
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