Europe Rises, US Futures Flat as Traders Wait for CPI

European shares opened higher on Wednesday, Oct. 14 while US stock futures barely moved. Every desk waits for the same number: the US consumer price report for September, due at 8:30 am Eastern. Economists forecast a 0.6 percent rise on the month, up from 0.4 percent in August, and a 3.6 percent rise on the year, up from 3.4 percent. Core prices, without food and energy, are forecast to rise 0.2 percent on the month and 2.5 percent on the year.

The pan European Stoxx 600 index was up 0.32 percent to 636.99 points by 0713 GMT. In London the FTSE 100 stood at 10,662.56, up 12.23 points or 0.11 percent, after closing down 0.1 percent at 10,650.33 on Tuesday. The DAX in Frankfurt traded near 25,375 points early, after a close of 25,260 points, down 0.1 percent. ASML lifted European tech after it raised its sales outlook on AI demand. Orsted fell 4.2 percent after Bloomberg reported that the US would re evaluate the permit for its Rhode Island wind farm. Oil climbed after two vessels were struck in the Strait of Hormuz, which capped the gains.

US futures pointed to a flat to slightly higher open. S&P 500 futures were up 0.2 percent and Nasdaq 100 futures up 0.1 percent in early European hours, FXStreet reported. The 10 year Treasury yield was quoted at 5.20 percent early Wednesday, down from 5.22 percent at Tuesday's London close. A University of Michigan survey put household inflation expectations for the year ahead at 4.7 percent for October.

The gap that decides the Fed call

Headline inflation is rising on energy. Core inflation is not, at least in the forecast. Brent crude near $106 a barrel explains most of the gap. The Federal Reserve holds its policy rate at 3.75 to 4.00 percent after a quarter point rise on Sep. 16. Markets price about a 77 to 79 percent chance that the Fed leaves rates unchanged at its Oct. 27 to 28 meeting. New York Fed President John Williams said overnight that he still expects one more rate rise before year end, and played down more tightening in 2027.

That is why the core monthly figure carries the day. A core print of 0.2 percent lets the Fed wait. A print of 0.3 percent or higher pulls the next rise toward October. Ian Lyngen, head of US rates strategy at BMO Capital Markets, said the release is likely to confirm the case for an October pause, but a clear upside surprise would shift the talk back to the risk that the Fed is falling behind on inflation.

A full calendar behind the print

Bank of America, Morgan Stanley and BlackRock report earnings on Wednesday, a day after JPMorgan missed estimates for the first time in almost three years. The Fed publishes its Beige Book of business reports at 2 pm Eastern. ECB President Christine Lagarde and Fed Governor Michelle Bowman also speak. For households, the print decides little today and a lot by December: it sets the path for mortgage rates, savings yields, and the next move in fuel driven prices.