US open: Inflation data, bond auction, Roblox IPO

US stocks jump after core CPI misses forecasts. Bond auction in focus and Roblox goes public.

USA (2)

US futures

Dow futures +0.5% at 31988

S&P futures +0.3% at 3875

Nasdaq futures +0.5% at 12858

In Europe

FTSE -0.1% at 6722

Dax +0.4% at 14496

Euro Stoxx +0.5% at 3805

Learn more about trading indices


 Softer core CPI calms nerves, boosts stocks

With the recent ramping up of inflation expectations, today’s CPI data was more closely watch than usual.

CPI rose 0.4% MoM in February, up from 0.3% in January & versus 0.3% expected.

Annually CPI rose to 1.7% in line with forecasts and up from 1.4% .

Core CPI which removes more volatile items is expected rose 1.3% YoY versus 1.4% expected.

The data calmed recent inflation scaremongering in the bond markets, sending stocks surging higher. For now, at least, it would appear that the market may have run away with itself. However, with the House of Representatives to vote through the $1.9 trillion stimulus package, inflation concerns may not be going anywhere fast.


US treasury auctions

Inflation data comes ahead of the $38 billion US 10 year note auction later today. This auction is expected to be more challenging than yesterday’s 3 year note auction.

It is worth remembering that this recent focus on yields intensified after a disappointing 7 year note auction on 25th February which recorded the worst participation since the debenture was introduced 11 years ago. Straight after the auction the 10 year yield broke 1.6% a yearly high and yields have been a key driver of market movement since.


Tech extends gains post CPI

After surging 3.7% in the previous session, Nasdaq futures looking to extend those gains in line with the broader market.

Easing bond yields saw growth stocks surge on Tuesday after a recent rout in tech saw the Nasdaq fall briefly into correction territory at the start of the week. Strong CPI data has calmed inflation fears driving demand for growth stocks once again.

Tesla which sawed 20% on Tuesday is expected to be in focus.

Oracle surged 10% on Tuesday and trades around its all time high of $73 ahead of reporting after the close. The software giant is expected to report EPS $1.11 on $10.07 billion in revenue. The street’s whisper number is EPS $1.13.

Where next for Oracle share price?
The share price has recently broken out of the upper band of its three month ascending channel reaching a fresh all time high of $73.22.
The break out has seen the share price jump into overbought territory on the RSI so it some consolidation or a pull back could be on the cards before moving higher.
Immediate resistance in the all time high of 73.22 before bulls could target 75.00.
Immediate support can be seen at 70.00 the upper band of the ascending channel, before the 20 sma at 65.00.


Roblox IPO’s

Game platform Roblox is set to go public on the New York Stock Exchange with a direct share listing at $45 per share. This values the company at $30 billion. The company has been a stand out beneficiary of the pandemic, experiencing a surge in daily users and average playing times.

Even so, in the 9 months until September Roblox reported a net loss of $197 million on revenues of $614 million.

My colleague Joshua Warner looks into Roblox and the IPO in more detail here.


FX – Euro recovers

The US Dollar have given up earlier gains is edging lower after a 0.4% decline in the previous session. Bond yields dragged the US Dollar lower on Tuesday whilst weak core CPI data has pulled the greenback into the red today.

EUR/USD – managed to pick itself off session lows of 1.1870 and move back up to 1.19 flatline thanks in part to better than expected French industrial production which jumped 3.3% in January, up significantly from -0.7% decline in December and well ahead of the 0.5% expected. Some good news for the ECB ahead of tomorrow’s ECB monetary policy announcement.

GBP/USD trades +0.02% at 1.3898

EUR/USD trades +0.02% at 1.1900

Fiona looks at the price action of EUR/USD and levels to watch here


Oil steady, base metals drop

After two straight days of steep declines, the selloff in oil is showing signs of steadying. Following an 11% OPEC inspired rally last week, oil sold off at the start of this week as Iraq the second largest producer in OPEC saw output above its quota in February.

Oil is consolidating at lower levels as attention now swings to the government’s inventory data. It comes after API’s weekly estimate shows 12.8 million barrel surge in crude stocks – the largest weekly jump since last April. Lat week’s EIA report revealed a 21.5 million barrel increase in inventory. This week an 800,000 rise forecast. Another larger than expected build could weigh on oil prices.

EIA inventory data due 15:30

US crude trades +0.75% at $64.50

Brent trades +0.5% at $67.90

Learn more about trading oil here.

The complete guide to trading oil markets

Looking aheadere

13:30 US CPI

15:00 BoC rate announcement

15:30 EIA oil inventory data

18:00 US 10 year bond auction


More from Indices

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.