Global Shares Mixed as Inflation Worries Set Tone Ahead of Key US Economic Data Releases

People walk by the New York Stock Exchange (NYSE) in Manhattan, New York City on Aug. 9, 2021. (Andrew Kelly/Reuters)

Global stocks were mixed on Nov. 24, with worries about inflation setting off fears that the Federal Reserve might move faster to raise rates, and as investors turn their focus to a bevy of U.S. economic data releases later in the day, including a key inflation gauge that the Fed relies on heavily to guide its monetary policy decisions.

Share markets were nervous in Asia as trading was buffeted by a step-up in U.S. Treasury yields as well as volatile oil prices in the face of a coordinated release of crude reserves by the United States and other countries the day prior, which did little to cool prices.

Crude oil prices and gasoline futures rose following Tuesday’s oil release announcement and on Wednesday remained near the prior day’s levels, with investors appearing sceptical about the effectiveness of the U.S.-led release of crude from strategic reserves in a bid to cool prices after repeated calls for to pump more oil failed to sway OPEC+ producers. Markets await an OPEC+ meeting next week, which will reveal whether the group will roll back its production boost.

The STOXX index of 600 European companies was down 0.03 percent by 7:21 a.m. New York time, trading near three-week lows on worries that rising infection rates across mainland Europe could lead to lockdowns. Still, the index remains just over 10 points off last week’s record high.

The MSCI world stock index was down 0.18 percent at 749.2 points, about 10 points below its all-time high hit about a week ago.

Investors face a slew of economic data in the United States later in the day ahead of Thursday’s Thanksgiving holiday, including the Fed’s preferred inflation gauge, the so-called personal consumption expenditures (PCE) price index.

Inflation in the United States has surged to three-decade highs, with investors sure to scrutinize the PCE price data closely, with an elevated number likely to fuel speculation that the Fed might phase out its bond buying program more quickly. Last month’s PCE data showed inflation rising 4.4 percent in the 12 months through September, the highest level since 1991. Consensus forecasts expect year-over-year inflation to accelerate to 4.6 percent in October.

The Fed will on Wednesday also release the minutes of its most recent policy meeting, with investors certain to review the document closely for clues about the central bank’s path for the timing of future interest rate hikes.

“There’s a risk that the Fed may speed up tapering and that in turn means the timetable for tightening may be brought forward,” said currency strategist Sim Moh Siong at Bank of Singapore.

The Labor Department will also release its weekly jobless claims data on Wednesday, with consensus forecasts predicting 260,000 initial filings for the week ended Nov. 19. Last week, initial claims—which are a barometer of labor market health—edged down to a fresh pandemic-era low of 268,000. A drop in that number on Wednesday would mark the eighth straight week of declines.

“One of the more positive trends in the U.S. economy has been the downward march of new claims for unemployment benefits. It is reasonable to expect that this proxy for layoffs should continue to improve, reflecting the overall strength of the job market and the need for many employers to retain or add to their workforces,” Bankrate Senior Economic Analyst Mark Hamrick told The Epoch Times in an emailed statement.

“New jobless claims have dropped for seven straight weeks, notching fresh pandemic-era lows, and reflecting a constructive path throughout October and continuing here in November,” Hamrick added.

Another economic data release due out later in the day is the University of Michigan’s consumer sentiment survey, which consensus forecasts expect to edge up to 66.9 from the prior survey’s reading of 66.8, which was the lowest in a decade.

The third-quarter GDP number is also due later Wednesday, as is data for personal income and spending.

Reuters contributed to this report.