Markets Turn Cautious Ahead of Key U.S. Core Inflation Data

Global financial markets are trading cautiously as investors await the release of U.S. consumer inflation data, with particular focus on core CPI, which is expected to provide important signals regarding the Federal Reserve’s future policy path.

European equity markets are mostly flat ahead of the data, while U.S. stock futures show limited fluctuations. Investors remain hesitant to take strong positions before gaining clearer insight into whether the Fed will continue interest rate cuts in 2026.

The U.S. dollar index (DXY) remains firm, supported by safe-haven demand amid heightened uncertainty. Meanwhile, U.S. Treasury yields are moving sideways, as markets weigh the risk of a stronger-than-expected inflation reading that could delay further monetary easing.

In commodity markets, gold prices are holding near elevated levels, reflecting demand for safe assets, while oil prices show a modest recovery driven by supply-demand expectations. Cryptocurrency markets, led by Bitcoin, are experiencing increased volatility as investors adjust short-term positions ahead of the inflation release.

According to market forecasts, headline U.S. inflation is expected to come in around 3.1% year-on-year, while core inflation is projected at approximately 3.0%. Analysts note that an upside surprise in core inflation could push expectations for Fed rate cuts further out, whereas a softer reading may support a short-term rebound in risk assets.