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Fed's favorite inflation gauge, European CPIs, OpenAI - what's moving markets -- The week's inflation watch is nearly over, with key data from the U.S. and Europe due for release later in the session. Wall Street looks set to open lower, but is on track to register gains in February, while the turmoil at the board level of Open AI faces a potential SEC investigation.

1. Fed’s favorite inflation gauge due 

The week’s main focal point is due later Thursday, January's personal consumption expenditures (PCE) price data, widely seen as the Federal Reserve’s preferred inflation gauge.

Recent economic data releases, and the consumer prices release in particular, have prompted investors to push back bets on rate cuts by the Federal Reserve to later in the year.

Investors will be watching closely to see if the upside surprise seen in the January CPI is replicated, underlining Fed caution about the timing of rate cuts.

Year-on-year headline and 'core' PCE inflation rates are forecast to slip to 2.4% and 2.8% respectively, but monthly rises are expected to be a healthy 0.3% and 0.4%.

2. Futures lower, but monthly gains likely 

U.S. stock futures edged lower Thursday, as investors warily await the release of key inflation data as well as more corporate earnings.

By 03:45 ET (08:45 GMT), the Dow futures contract was 90 points, or 0.2%, lower, S&P 500 futures had dipped by 9 points or 0.2%, and Nasdaq 100 futures had fallen by 35 points or 0.2%.

The three main indices closed lower Wednesday, but are on track to register gains this month after strong results from Nvidia (NASDAQ:NVDA) seemed to remove worries about the sustainability of the AI-driven rally. 

The Nasdaq Composite is on course to post a gain of over 5% this month, the S&P 500 has jumped 4.6%, while the Dow Jones Industrial Average has added 2.1%. This would mark the DJIA’s first four-month winning streak since May 2021.

There are more earnings to digest Thursday, including from Best Buy (NYSE:BBY), Hewlett Packard Enterprise (NYSE:HPE) and Bath & Body Works (NYSE:BBWI), while the likes of Snowflake (NYSE:SNOW) and Salesforce (NYSE:CRM) will also be in the spotlight after they released results after the close Wednesday. 

3. SEC investigating OpenAI leadership turmoil - WSJ

The saga surrounding the leadership of OpenAI, and the potential that investors were misled, is set to be investigated by the Securities and Exchange Commission, according to a report by the Wall Street Journal, with the newspaper citing people familiar with the matter.

The move followed OpenAI board's decision in November to fire Sam Altman as CEO and remove him from the board, only for Altman to return to his position just days later. 

The regulator is specifically looking into internal communications involving Altman, and had also sent a subopena to OpenAI in December, the WSJ report showed.

OpenAI shot into the public spotlight with the release of its ChatGPT software in late-2022, prompting a broader rush into generative artificial intelligence.

4. European inflation data due

Europe has its own inflation data to digest Thursday, with consumer prices due from the German states, France and Spain, ahead of the eurozone figures on Friday.

Inflation in the eurozone is retreating, with February’s CPI seen falling to 2.5% on an annual basis, from 2.8% the prior month.

However, officials at the European Central Bank have consistently cautioned that it’s still too early for the central bank to cut interest rates.

Bundesbank President Joachim Nagel reiterated that view on Wednesday.

"We still lack more reliable data on wage developments and confirmation that with these data, we will get inflation back to 2% in 2025," Nagel said. "Next week's projections will be an important milestone.”

The ECB will release new quarterly economic projections next Thursday.

5. Oil hit by U.S. inventories build

Oil prices edged lower Thursday, adding to the previous session’s losses as a sharp build in U.S. crude stocks reinforced concerns about demand in the world’s largest economy.

By 043:45 ET, the U.S. crude futures traded 0.6% lower at $78.03 a barrel, while the Brent contract dropped 0.7% to $81.60 per barrel. 

Crude inventories rose for the fifth consecutive week, increasing by 4.2 million barrels to 447.2 million barrels in the week ended Feb. 23, official data from the Energy Information Administration showed on Wednesday, heightening investors' worries over a slow economy and reduced oil demand in the largest consumer in the world.

Traders will be keeping an eye on the U.S. inflation data for clues about future economic activity, as well as events in the Middle East and the possible extension of voluntary oil output cuts from the producer group, the Organization of Petroleum Exporting Countries and its allies.

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