1. Inflation on watch as Fed rate hike nears
Market analysts expect consumer prices to rise 0.2%, weakening from January’s 0.5% increase, while core inflation is forecast to inch up 0.2%, a touch slower than a month earlier, when core CPI recorded a 0.3% gain.
On a yearly base, core CPI is projected to climb 1.8%, unchanged from 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. The central bank usually tries to aim for 2% core inflation or less.
Rising inflation would be a catalyst to push the Fed toward raising interest rates at a faster pace than currently expected.
Markets widely anticipate the Fed to hike rates by 25 basis points to 1.50%-1-75% at the March meeting while placing the odds for three hikes in 2018 at around 74%, according to Investing.com’s Fed Rate Monitor Tool.
2. Global stocks upbeat ahead of CPI
After the Dow and the S&P 500 failed to follow the Nasdaq Composite’s example as the tech-heavy index hit record highs a day earlier, U.S. futures pointed to a higher open on Wall Street on Tuesday as investors waiting for inflation data. At 5:58AM ET (9:58GMT), the blue-chip Dow futures gained 56 points, or 0.22%, S&P 500 futuresrose 5 points, or 0.19%, while the Nasdaq 100 futures edged forward 5 points, or 0.07%.
Elsewhere, European shares were trading higher amid the generally bullish stock sentiment. The benchmark Euro Stoxx 50 gained 0.7% by 5:59AM ET (9:59GMT), Germany’s Dax rose 0.8%, while the FTSE 100 edged forward 0.2%.
Earlier, Asian stocks closed with mixed signs in a choppy session on Tuesday as the mixed performance by U.S. stocks cooled investors’ risk appetite.
3. Trump halts Broadcom takeover of Qualcomm
U.S. President Donald Trump on Monday blocked microchip maker Broadcom’s (NASDAQ:AVGO) proposed takeover of Qualcomm (NASDAQ:QCOM) on national security grounds, ending what would have been the technology industry’s biggest deal ever amid concerns that it would give China the upper hand in mobile communications.
Qualcomm’s shares tumbled nearly 5% in pre-market trade on Tuesday while Intel (NASDAQ:INTC) was up 0.8%. There had been rumors that the Dow component was considering an alternative defensive bid as the Broadcomm-Qualcomm hookup would increase competition.
4. Trump may pick Kudlow for NEC; Pennsylvania special election on tap
Larry Kudlow is the leading contender to head President Donald Trump’s National Economic Council and would take the job if offered it, according to a report from CNBC.
Kudlow appears to be the frontrunner to replace Gary Cohn as a favorite of both Trump and several of his advisors. The choice is notable because Kudlow was openly against the implementation of steel and aluminum tariffs that were arguably the reason for Cohn’s resignation.
Investors were also keeping a close eye on special elections in Pennsylvania which kick off on Tuesday. Trump-backed Republican Rick Saccone will face off against Democrat Conor Lamb in the race to replace GOP member Tim Murphy after his resignation last October.
While Saccone is largely expected to take the House seat in the steel state, the margin of his win is being closely watched to take the pulse of the American public as midterm elections loom. A strong turnout by Democrats may turn up the heat on the Trump administration ahead of several elections that could possibility threaten the Republican majority in the House.
5. Japan to propose crypto regulations to G20
Japan will urge its G20 counterparts at a meeting next week to beef up efforts to prevent cryptocurrencies from being used for money laundering, according to Reuters’ report citing a government official with direct knowledge of the matter.
Cryptocurrencies were also under pressure on Tuesday as Switzerland-based Bank for International Settlements (BIS) said digital coins remain far too risky to be used as legal tender any time soon.
At 5:59AM ET (9:59GMT), Bitcoin, the world’s biggest virtual currency by market cap was down around 4.4% to $9,259.30.
Other major cryptocurrencies were also lower, with Ethereum, the world’s second largest cryptocurrency by market cap, falling about 4% to $703.98.
The third largest cryptocurrency Ripple lost roughly 5% to trade at $0.78384.