What’s in Today’s Report:
- Why Fed Rate Hike Expectations Are Still Rising
- Did Yesterday’s Economic Data Signal Stagflation?
- EIA Analysis and Oil Market Update
Futures are extending Wednesday’s declines and are moderately lower as more global inflation data came in hotter than expected.
Euro Zone HICP rose 8.5% vs. (E) 8.2% y/y and joined French, Spanish and German CPIs as signaling a bounce back in inflation. That’s pushing global yields higher and weighing on futures (just like it weighed on stocks on Wednesday).
Today focus will remain on economic data and the key report is Unit Labor Costs (E: 1.4%). Wages are a major source of inflation the Fed is trying to bring down, so if Unit Labor Costs are lower than expected, that will likely cause a bounce in stocks and bonds. Other notable events today include Jobless Claims (E: 200K) and two Fed speakers, Waller (4:00 p.m. ET) and Kashkari (6:00 p.m. ET), although they shouldn’t move markets.