US stock futures edged higher and the dollar firmed modestly on Tuesday as investors await a key inflation report that could influence the Federal Reserve’s interest rate trajectory this year.
With about an hour to go before the report comes out and two hours before markets open, futures for the S&P 500 and the Dow Jones Industrial Average are up 0.2 per cent while those for the Nasdaq 100 gained 0.1 per cent.
The dollar — as measured by the DXY index — also advanced 0.1 per cent.
Analysts are forecasting data to show headline inflation cooled in February on a monthly basis. On a year-on-year basis, consumer price increases are expected to have accelerated to 2.2 per cent, compared to 2.1 per cent in January. Core CPI, which strips out more volatile items, is expected to remain unchanged at 1.8 per cent.
“Today’s inflation release — while not being the Fed’s preferred measure — will offer some insight into the direction of travel for US prices at a time when the labour market is tight and tax reform is providing an additional stimulus,” said Craig Erlam, senior market analyst at Oanda.
“As we saw on Friday though, there may be more slack in the labour market than the central bank was factoring in and so traders and policymakers will be looking at wages and inflation data for clear signs that the data are confirming their forecasts.”