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European equities and Wall Street stock futures drifted on Tuesday as caution ahead of US inflation data tempered a long winning streak for equities.

The Stoxx Europe 600, which has closed higher for 13 of the past 15 trading sessions and hit its latest all-time high on Monday, was flat in early dealings.

Futures contracts on the US blue-chip S&P 500 share index, which on Monday closed out its longest unbroken series of records since 1997, slipped 0.1 per cent. Elsewhere, London’s FTSE 100 fell 0.3 per cent while the Hang Seng in Hong Kong rose 0.2 per cent. Tokyo’s Nikkei 225 closed 0.8 per cent lower.

Stock markets have rallied in Europe and the US during a better than expected third-quarter earnings season. The US Federal Reserve, the world’s most influential central bank, has signalled it will keep borrowing costs at record lows despite high inflation, providing a further boon to markets.

Economists expect data published on Wednesday to show that US consumer price growth accelerated to 5.8 per cent in October from the same month last year, its highest level since 1990.

The pace of price rises in the US has been running above 5 per cent since May, far exceeding the Fed’s target of an average rate of 2 per cent.

Government debt markets were steady. The yield on the 10-year Treasury note, which moves inversely to the price of the debt and underpins borrowing costs and equity valuations worldwide, fell 0.02 percentage points to 1.481 per cent.

Germany’s equivalent Bund yield was flat at minus 0.252 per cent, close to its lowest in a month after a volatile few weeks as traders debated when the European Central Bank and the Bank of England may tighten monetary policy.

The 10-year Bund yield traded about minus 0.8 per cent at the beginning of the month while the 10-year Treasury yield was about 1.6 per cent.

Sterling was steady against the dollar at $1.356. The dollar index, which measures the US currency against six others, was flat. Brent crude, the oil benchmark, added 0.4 per cent to $83.85 a barrel.



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