Early Morning Call: Traders cautious ahead of CPI; Amazon, Alphabet results

US equity markets were mixed as the Dow Jones and S&P 500 posted small gains, while Nasdaq Composite ended lower. Overnight in Asia, the session was equally mixed, with Japan Nikkei 225 gaining, and Hong Kong and mainland China indices trading lower. Australia and New Zealand equity market were close for Anzac Day.

Newly appointed Bank of Japan Governor Kazuo Ueda is preparing the ground for his first rate decision later this week. Earlier this Tuesday, he said there would be a possibility of raising interest rates if inflation and wage growth overshot expectations. But for now, the BoJ needs to keep an ultra-loose monetary policy. Talking to the Japanese parliament, Kazuo Ueda said that "In light of current economic, price and financial developments, it's appropriate to maintain monetary easing, now conducted through yield curve control, but if wage growth and inflation accelerates faster-than-expected and warrants tightening monetary policy, the BoJ stands ready to respond by raising interest rates". On Friday, the BoJ is expected to keep its monetary settings unchanged and dovish policy guidance.

Later this afternoon, S&P/Case-Shiller home price index, new home sales will provide an updated picture of the US housing market. At 3pm, the Conference board consumer confidence is forecast to stay broadly unchanged, at 104.2 in April, after 104 in March, and we're also expecting the API weekly crude oil inventories at 9.30pm. The dollar is on the back foot after weaker-than-expected Chicago Fed national activity and Dallas Fed manufacturing indices weighed on the greenback. Now, currency traders await this afternoon's consumer confidence, as well as Q1 GDP on Thursday and Core PCE price index on Friday.

Elsewhere on the equity market, Associated British Foods reported a 3% fall in operating profit to £684Mln, while group revenue rose 21%. The Primark owner confirmed its guidance for a flat outcome in the full year.

In Switzerland, UBS' net profit dropped 52% to $1.03Bln, as it had to increase provisions linked to U.S. residential mortgage-backed securities litigation by $665 million. The world's largest wealth manager reported inflows of $42 billion in the first three months of the year. Its flagship wealth management division received $28 billion in net new money. The bank also confirmed that the acquisition if Credit Suisse is most likely to be completed in the current quarter. UBS agreed to take Credit Suisse over for 3 billion Swiss francs and to assume up to 5 billion francs in losses.

Novartis raised its 2023 profit forecast, after posting better-than expected sales for the first quarter. Novartis also confirmed the Sandoz spinoff remains on track for the second half of this year. Nestle posted better-than-expected first-quarter sales as higher prices offset tepid sales volume. Nestle increased its prices by 9.8% during the first quarter, but sales volumes fell by 0.5%.

Over in the US, we have quite a few companies reporting today, starting at lunchtime with McDonald's. The group is expected to post adjusted earnings of $2.30 per share, which would be a 1% increase on the same quarter a year ago, while revenue is forecast to decline by 1.9% to $5.56Bln. Earlier in January this year, McDonalds announced a reorganisation plan which would involve job cuts and reduce pay. This plan is now underway since the beginning of April. As part of its plan to become more efficient and innovative, McDonalds recently unveiled its first automated location.

Also due to report before the market open is General Motors. The Street expects earnings of $1.71 per share on revenue of just under $39Bln. Last month, the group announced that its sales in its first-quarter rose by 18% year-on-year to 603,000 vehicles.