US Stock Futures Lower Awaiting Inflation Report and FOMC Protocol
US stock futures pointed to a lower open, as the possibility of an American military strike on Syria gave investors pause. US shares climbed on Tuesday, with the three major averages all scoring gains of nearly 2%, after China presented a less-aggressive stance in trade tensions with the US, easing fears over a full-blown trade war. European stock markets fell today, with the German DAX declined by 0.51%, and the France’s CAC down 0.42%.
The US Commerce Department will publish March inflation figures, with traders watching to see if the data will better-than-expected, just as producer prices did the day before. Market analysts expect consumer prices to rise 2.4% on a year-over-year basis, up from 2.2% in February. Core inflation, which excludes food and fuel, is projected to climb 2.1%, a tad faster than the 1.8%-gain recorded in the preceding month.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. A jump in inflation could be a sign that the Fed would have to raise interest rates more rapidly if it begins to run above its 2% target.
The US Federal Reserve will release minutes of its last meeting, which may provide further hints on the pace of future rate hikes this year. The US central bank raised interest rates as widely expected following its meeting on March 21 and stuck to its projection for two more rate hikes this year. Fed Chief Jerome Powell said last week the Fed will likely need to keep raising interest rates this year to keep inflation under control. His comments signaled that borrowing costs will continue to climb this year despite the recent market volatility caused by the trade dispute. Traders are currently pricing in around a 90% chance of a rate hike in June.