The New York Stock Exchange is set to open slightly higher on Wednesday morning, following unsurprising consumer price data which, as expected, paves the way for a rate cut in September.

Half an hour before the open, futures on the main New York indices are up by around 0.1%, pointing to a modest early session advance.

According to the Labor Department, the consumer price index (CPI) rose by 2.9% in July year-on-year, its slowest pace since March 2021, against a consensus of 3%.

Excluding energy and food products, two traditionally volatile categories, the annual inflation rate came out at 3.2% last month, the lowest since April 2021, while economists were expecting it at 3.3%.

These figures - which confirm the trend towards decelerating inflation - should lead the Fed, as expected, to initiate its monetary easing cycle at the end of its September 17-18 meeting.

Wall Street index futures did not move much following these better-than-expected figures.

The vast majority of traders (56.5%) expected the Federal Reserve to cut rates by 25 basis points next month, but a minority (43.5%) did not rule out a 50 basis point easing.

The lower-than-expected data did, however, cause the dollar to fall, allowing the euro to climb back towards 1.0120.

At the same time, the yield on 10-year Treasuries stabilized at around 3.85%, the lowest since the end of 2023.

These unconvincing reactions show that market attention is now focused less on inflation trends than on the health of the economy and the threat of a possible recession in the second half of the year.

In a note published today, UBS strategists say they continue to expect a "high" risk of recession, which they estimate at 53%, although this figure is lower than the 60% they were expecting a few months ago and the 75% they were forecasting a year ago.

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