U.S. stock futures down, dollar up after inflation data

LONDON (Reuters) – U.S. stock index futures extended losses on Wednesday and the dollar built on earlier gains as higher-than-expected U.S. inflation data raised bets of monetary tightening.

The U.S. consumer price index rose 0.9% in October after gaining 0.4% in September, accelerating 6.2% in the 12 months through October, the largest year-on-year advance since November 1990.

Excluding the volatile food and energy components, the CPI gained 0.6% after climbing 0.2% in September. The so-called core CPI jumped 4.6% on a year-on-year basis, the largest increase since August 1991. Economists polled by Reuters had forecast the overall CPI shooting up 0.6% and the core CPI rising 0.4%.

“The numbers today, US and globally, are showing that what we have is a demand-driven inflation that can be curtailed with higher interest rates and the Fed is behind the curve. They may now be forced into raising rates sooner rather than later,” said Paul Nolte, portfolio manager, Kingsview Asset Management in Chicago.

S&P 500 futures were down 0.43% after Wall Street closed lower on Tuesday, ending a multi-day rally of consecutive record closing highs as the end of a consensus-beating earnings season comes into view.

The dollar gained 0.42% against an index of currencies to 94.37. It rose 0.52% against the yen to 113.41 after hitting a one-month low on Tuesday, while the euro fell 0.4% to $1.1545.

The benchmark 10-year U.S. Treasury yield picked up 3.7 basis points to 1.4847% after it touched a six-week low of 1.4150% on Tuesday.

Euro zone bond yields also ticked up, with Germany’s 10-year yield, the benchmark for the bloc, up 1.7 basis points at -0.277%, above a seven-week low of -0.299% touched on Tuesday. [GVD/EUR]

European stocks dipped 0.11%, moving away from recent record highs, though Britain’s FTSE 100 index rose 0.57%, partly on stronger energy stocks.

The MSCI global equity index fell 0.12%.

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