(Bloomberg) — European stocks fell along with US equity futures at the start of a data-heavy week that will test the market’s conviction that Federal Reserve Chair Jerome Powell and his colleagues are moving closer to dialing back their inflation fight.
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First off is Tuesday’s US inflation data, which investors will use to predict when the Fed will start lowering interest rates. Swaps traders see the first cut in June as a virtual lock, with nearly four quarter-point cuts expected over the next year. A stronger-than-anticipated jump in consumer prices could upend that pricing and further derail the stocks rally.
The Stoxx Europe 600 index dropped 0.5% at the open, with basic resources leading declines after iron ore slumped 5% on slackening demand from China. Futures on the S&P 500 and Nasdaq 100 edged lower. The 10-year Treasury yield fell two basis points.
Meanwhile, a gauge of the dollar is on track for a…
