Economist Takeaway
"It is a positive surprise compared with consensus, but broadly in line with our forecasts of 3.6 percent," said Anjali Verma, chief economist at PhillipCapital. "We expect inflation to be muted, going forward, and should hover around the 4 Most market participants think the hike won’t be too hawkish or too dovish,” said Martin Enlund, chief analyst at Nordea Markets in Stockholm. “If I was the Fed I would try to cement current market pricing and not rock the boat in any direction.”
Stocks
The Stoxx Europe 600 Index was led by a 21 percent surge in Mediaset SpA after Vivendi SA said it may buy a 20 percent stake in the broadcaster. UniCredit was the second-biggest gainer with a 8.6 percent advance. The broader index rose 0.8 percent as of 6:37 a.m. New York time, with trading volume 24 percent higher than the 30-day average at this time of day.
Banca Monte dei Paschi di Siena SpA climbed after a European Union official said the lender may be eligible for a precautionary recapitalization if efforts to plug the private sector fail.
S&P 500 Index futures advanced 0.4 percent. The main gauge slid 0.1 percent on Monday after ending last week at a record.
Currencies
The yen weakened 0.3 percent to 115.40 per dollar, following Monday’s 0.3 percent climb. The euro fell 0.3 percent to $1.0608.
The pound gained against all of its Group-of-10 peers as a report showed inflation accelerated to the highest level in more than two years.
Bonds
Italian bonds gained for a second day, with the yield on 10-year bonds falling nine basis points to 1.90 percent.
Yields on Treasury notes due in 10 years were at 2.46 percent. The securities ended Monday little changed after rising by as much as six basis points to touch 2.53 percent, their highest level since September 2014.
Commodities
Brent crude rose 0.7 percent to $56.10, set for the highest close since July 2015, while West Texas Intermediate oil added 0.8 percent to $53.23. The International Energy Agency said Tuesday global oil markets will swing from surplus to deficit in the first half of 2017 as OPEC and other producers follow through on an agreement to cut supply.
Nickel climbed 1.5 percent $11,470 a ton, and copper fell to a one-week low as stockpiles tracked by the London Metal Exchange posted the biggest two-day gain since June. Gold traded near a 10-month low as investors prepared for the first U.S. rate increase in a year.