Markets on guard for US, China inflation risk
By Nell Mackenzie
LONDON/SYDNEY (Reuters) -World shares dipped on Monday after a mixed U.S. jobs report triggered a rally in beaten-down bonds, but new hurdles lay ahead in the shape of U.S. and Chinese inflation figures due later this week.
MSCI's broadest index of shares edged 0.2% lower in thin trade, after losing 2.6% last week.
European shares fell 0.3%, weighed down by heavyweight mining, luxury and oil stocks, which were only in part offset by gains in defensive drugmakers.
Meanwhile in the U.S., stock markets looked set to open higher. S&P index futures added 0.2%, while Nasdaq futures ticked up 0.4%.
With roughly 90% of S&P 500 earnings reported, results are 4% better than consensus estimates, with more than 79% of companies beating the Street, according to Refinitiv I/B/E/S data. Results due this week include Walt Disney (NYSE:DIS) and News Corp (NASDAQ:NWSA).
Data on U.S. consumer prices are forecast to show headline inflation picking up slightly to an annual 3.3%, but the more important core rate is seen slowing to 4.7%.
«Markets are waiting to see this week's CPI reports out of the US and China,» said Michael Hewson, chief market analyst at CMC Markets.
While bond markets might be driven this week by the U.S. bond issuance that has «played havoc» with yields, many economic data points show «significant disinflation is starting to take hold,» he said.
U.S. yields rose by 3-4 basis points (bps) after falling more than 10 bps on Friday.
«Some of the Fed comments over the weekend from Michelle Bowman came in more hawkish than people expected. Currently, there's a wider band of uncertainty that pervades markets,» said James Rossiter, head of global macro strategy at TD Securities in London.
The U.S. Federal
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