Marketmind: Stumbling away

A look at the day ahead in European and global markets from Ankur Banerjee

Chip giant Intel’s grim earnings report along with mixed U.S data that showed a resilient economy but a labour market that remains tight will likely dominate investors’ minds and dictate Friday’s trading.

The U.S. chip bellwether expects to lose money in the current quarter as two pillars of its success in the past few years — the PC and data centre businesses — face slowing demand.

“We stumbled … we lost momentum,” said Chief Executive Pat Gelsinger.

GRAPHIC – Intel quarterly revenue falls most in at least two decades

https://www.reuters.com/graphics/INTEL-RESULTS/REVENUE/mypmogzxzpr/chart.png

In contrast, European chipmaker STMicroelectronics cited strong demand from automotive and industrial customers on Thursday as it beat earnings and sales targets.

Meanwhile, better-than-estimated U.S. GDP data has provided a fillip to investors for some risk-on rally, with MSCI’s broadest index of Asia-Pacific shares outside Japan at a nine-month high and set for its best ever January performance.

The Japanese yen rose against the dollar after Tokyo’s consumer inflation, a leading indicator of nationwide trends, touched a near 42-year high and reinforced market expectations that the Bank of Japan will soon have to step away from its ultra-easy policy.

GRAPHIC – Tokyo core CPI rises, highest in almost 42 years

https://www.reuters.com/graphics/JAPAN-ECONOMY/INFLATION/zgvobroerpd/chart_eikon.jpg

Before next week’s central bank meetings (that’s Fed, ECB and BOE on the deck) take all of investors’ attention, the focus on Friday will be on the Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) data. The core PCE price index is expected to rise 0.3% in December, according to Reuters poll of economists.

Key developments that could influence markets on Friday:

Economic events: Sweden unemployment rate for December, Spain Q4 GDP data and core U.S. PCE data

(Reporting by Ankur Banerjee; Editing by Kim Coghill)