Softer US Producer Prices Lift Futures as Yields and the Dollar Ease

World markets appear headed toward a somewhat subdued finish to a volatile week, with overnight trading in stocks and morning trading in futures mixed and relatively quiet so far. Microsoft* shares have been taking back lost ground in premarket trading as Outlook and other services come back online.

US producer prices came in at 6.5%, below the Street estimate of 6.6% but up from the previous 6.3%, showing that inflation pressures continued to build from last month even though the reading was not as bad as feared. Following the release, Treasury yields have started to fall back along with the US Dollar, while index futures have been climbing.

Cisco Systems beat expectations at $1.40 versus the Street estimate of $1.33, supported by strong growth in AI applications for its networking equipment. Shares are down 3.7% in premarket trading.

NASDAQ futures are up 0.4%, while Dow futures are up 0.5%. In Asia, the Nikkei gained 0.5%, while the Hang Seng fell 0.6%. In Europe, the DAX is steady and the FTSE is up 0.1%.

In Commodities, Crude Oil is down 0.2% but holding above $87.50/bbl, while Brent Crude is up 0.3% and trading above $95.00/bbl. Gasoline is down 0.9%, trading below $2.65/gallon. Gold is steady below $4,000/oz, Silver is down 0.6% and trading below $50.00/oz, while Copper has fallen 0.7% to below $6.15/lb.

In Rates, the US 10-year Treasury note yield is falling away from 5.15%, while the US 30-year Treasury note yield is slipping back from 5.50%. The USD Index is down 0.1%, while the Euro and Loonie are both up 0.1%.

Looking ahead, three more Fed officials are speaking this afternoon. China retail sales and industrial production are due early Monday morning.

*Shares of Microsoft are held in some portfolios managed by SIA Wealth Management.

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