LONDON/SYDNEY, Sept 13 - Shares fell on Wednesday as markets braced for key U.S. inflation data, with a spike in oil prices fuelling anxiety that price pressures are proving more ingrained than hoped.
While core CPI is seen cooling to 4.3% year-on-year in August from 4.7%, rising energy costs are forecast to keep headline inflation elevated at 3.6%. And the latest spike in oil prices to 10-month highs is unlikely to escape the Fed's attention. The euro, meanwhile, was supported by a hawkish shift in expectations for the European Central Bank on Thursday, with bets now favouring a hike, after a Reuters report that the ECB expects inflation will stay above 3% next year in its updated forecasts.Wall Street futures gauges pointed to slim losses. The S&P 500 fell 0.6% overnight, with the Nasdaq losing 1%.
Treasury yields also climbed on Wednesday, with the two-year note touching 5.0263%, compared with a U.S. close of 5.005%. Ten-year yields held at 4.2842%, up from the close of 4.264%.ECB HIKE BETS The euro was down 0.1% at $1.074, after nearing one-week highs on the Reuters story which was published late on Tuesday.