Global Markets React to Holiday-Thinned Trade and US Inflation Report

European stocks edged up as investors await the US inflation report, with optimism over potential Federal Reserve interest-rate cuts. The S&P 500 closed at a new record high, driven by a renewed rally in big tech companies. Treasury yields ticked lower, while the dollar was steady after wrapping up a sixth week of gains. Tuesday’s inflation report is crucial for market direction, with investors looking for clues on the timing of a first Fed rate cut. Swaps market pricing shows reduced expectations for a Fed cut in March, and UBS Global Wealth Management anticipates a positive macro outcome for bonds despite differing scenarios for Fed rate cuts. In Asia, trading levels were muted due to Lunar New Year holidays, and in commodities, oil prices fell following last week’s advance.