US stocks rebound, Bonds steady ahead of inflation data

August 09, 2023 (MLN): U.S. Stocks rose and bonds steadied in subdued trading Wednesday as traders avoided big positions before a key US inflation report, Bloomberg reported.

A gauge of European equities bounced 0.6% in early trading, while US futures pointed to a recovery on Wall Street.

Dip buyers arrived Tuesday to halt a slide sparked by worries about the financial system and the economy.

Investors also took some comfort from assurances by the Italian government that a new windfall tax will be capped.

The big focus for the market is the US inflation report due Thursday. The latest reading is forecast to show that consumer prices grew 3.3% in July from a year ago, up slightly from the prior month but still near the slowest pace in two years.

Treasury 10-year yields traded near 4%, steadying after a well-received three-year note auction. Tuesday’s $42 billion sale of the notes produced a lower-than-expected yield, a sign that demand was stronger than anticipated.

Meanwhile, China’s inflation data showed a 0.3% drop in consumer prices in July from a year ago, less than forecast but nevertheless a fall into deflation.

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