- Global shares traded near record highs on Tuesday as investors await the release of US consumer price index data.
- A series of Wall Street Bank earnings due this week also contributed to positive investor sentiment.
- Oil recovered ground after coming under pressure on Monday.
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Global shares traded near record highs on Tuesday ahead of a key read of US inflation that investors will scour for clues about the likely outlook for monetary policy, and ahead of the first of Wall Street's big bank earnings.
S&P 500 futures were last flat and Dow Jones futures were down 0.07%, while Nasdaq futures were up 0.31% at 5:56 am E.T. on Tuesday after all of the major US stock indices closed at all-time highs the day before.
US consumer price data for June is due later in the day. Consensus expectations are that headline inflation will drop from May's 5% to 4.9% year-on-year for June and core inflation – which excludes highly volatile sectors like food and energy – is expected to have risen by 4% from last year.
"The focus will also be on the report's details as to whether the price pressures are coming from areas associated with the reopening and are more likely to be transitory, or whether they're spreading to other categories that could signal a more permanent increase." Deutsche Bank analysts said.
The Federal Reserve has said it believes the pickup in inflation is transitory and will not warrant a revision of its highly accommodative monetary policy. Any evidence of a stickier increase could prompt investors to reassess when they expect the central bank to wind down its current support for the economy.
The yield on the US 10-year Treasury note was last at 1.370%, up by less than one basis point. It reached its lowest since mid-February late last week, reflecting a belief among investors that the Fed's assessment of the economy is correct.
Investors were also waiting for the first of the second-quarter earnings releases of major Wall Street banks, starting with JPMorgan on Tuesday. Analysts and investors are expecting strong second quarter performance across the board.
Oil recovered following a sell-off on Monday in light of the increase in cases of COVID-19 around the world that have prompted new restrictions on movement. The stand-off among OPEC+ members over the group's crude production policy is keeping energy investors nervous.
"If a deal can't be reached shortly, it will leave no choice but to scrap the proposed output increase of 400,000 barrels a day for August due to the time required to settle sales contracts between countries and suppliers." Thomas Westwater, analyst at DailyFX said.
Brent crude was last at 75.66 per barrel, up 0.67% and WTI crude rose by 0.62% to 74.56 per barrel.
European markets had a mixed start to the day. London's FTSE 100 was last up 0.11% after the government confirmed lockdown restrictions would end next week. The Euro Stoxx 50 was last down 0.09%, while Frankfurt's DAX had slipped by 0.1% after closing at a record high on Monday.
Asian markets had another strong trading day after China posted much stronger than expected trade figures - exports were up 32.2% rather than the expected 23% gain in June, giving investors hope in light of continued supply chain issues, rising COVID cases and extended restrictions. Tokyo's Nikkei 225 closed 0.52% higher, the Shanghai Composite had gained 0.53% and the Hong Kong based Hang Seng index added 1.58%.