China data, US inflation stats in focus as new week starts

investmentnews.com:

US equity futures fell and European stocks wavered at the start of a week in which inflation and interest rates will be in focus after soft price data raised fresh worries about China’s economic recovery.

Traders will look to US inflation numbers on Wednesday for signals on the Federal Reserve’s likely policy path and the rising risk of a recession. UK jobs data Tuesday will also be crucial in determining the Bank of England’s next policy decision in August.

US Treasury Secretary Janet Yellen said on the weekend she wouldn’t rule out the threat of a US recession, noting that it was “appropriate and normal” for growth to moderate and that inflation remains too high.

“Everyone is looking at inflation or has been looking at inflation for a long time,” Nicolo Bocchin, global head of fixed income at Azimut Group, said on Bloomberg Television. “Now it’s time to look at growth.”

The Stoxx Europe 600 index flcutuated after its biggest weekly drop since mid-March. Miners were among the leading decliners, with Rio Tinto Group falling more than 1% after its chairman warned of headwinds from China for raw materials including iron ore. Bayer AG rose as much as 3.2% after a report that the pharmaceutical company is planning to spin off its agricultural chemicals business.

Futures on the S&P 500 and Nasdaq 100 were down about 0.3% and 0.4% respectively after most American equities dropped Friday when wage data showed inflation remained a threat.

Treasury yields were little changed, with the two-year remaining below 5%, and the 10-year just above 4%. A gauge of the dollar was flat.

An Asia equity benchmark slipped for a fourth day, heading for the lowest close in more than a month. Shares in Hong Kong and mainland China pared gains