A look at the day ahead in U.S. and global markets from Mike Dolan

Wall Street and world stock markets have cleared the first-quarter corporate earnings season comfortably enough to be back stalking record highs, but macro markets don't want to budge much further until they see this week's U.S. inflation update.

Wednesday's U.S. consumer price report sucks much of the oxygen out of the early part of the markets week - critical as it is in revealing whether disinflation has resumed after a sticky Q1, and at least enough to keep Federal Reserve easing expectations this year in the frame.

For what it's worth, consensus forecasts for the April print see monthly core CPI gains slowing to a 0.3% pace from 0.4% in March - dragging the annual rate down to 3.6% from 3.8%. The headline rate is expected to slip back to 3.4% from 3.5%.

The New York Fed's survey of inflation expectations for last month gets released later on Monday to give color to the picture in advance - and provide a reality check to the uptick in the equivalent University of Michigan poll that ruffled feathers on Wall Street on Friday.

Despite the bumpier U.S. CPI readings through the first quarter, one-year ahead inflation expectations in the NY Fed survey stayed constant at 3% through the first three months of the year. The University of Michigan's 1-year outlook, however, jumped to 3.5% this month from 3.2% in April - even as consumer sentiment fell sharply.

Also unusual compared to recent months is that the CPI data is released after the April producer price report, which is due out Tuesday. The core annual PPI rate is expected to be steady at 2.4%.

And whatever heat is left in U.S. inflation, it's certainly not there in China. Although CPI rose above forecast there last month, it is still running at only 0.3% year-on-year while producer price deflation continues at an annual 2.5%.

With new bank lending in China falling more than expected in April, and broad credit growth hitting a record low, pressure for more stimulus to support the economy remains intense.

China's finance ministry said it will this week start the long-awaited sales of 1 trillion yuan ($138.23 billion) of long-term treasury bonds, proceeds from which Beijing hopes to use to help spur key sectors.

Beginning on Friday, Reuters sources said there will be 300 billion yuan worth of 20-year bonds, 600 billion yuan worth of 30-year bonds and 100 billion yuan worth of 50-year bonds sold.

For Chinese stocks, however, geopolitics is never far from the headlines. Even though Hong Kong stocks rose again on Monday, mainland shares were more subdued as new energy vehicle shares lost 2.2% following Friday's news that U.S. President Joe Biden's planned new China tariffs would including a major hike in levies on electric vehicles.

World stocks were flat more generally, with Tokyo off a touch as a slightly weaker yen mostly held the line.

In a sign that recent government intervention to support the yen may be shifting market psychology, the latest Commodity Futures Trading Commission data showed that hedge funds and speculators slashed their short yen positions by 20% in the week to May 7 - the biggest weekly yen-bullish swing since 2020.

Back on Wall Street, the CPI vigil left the S&P500 little changed on Friday and futures are likewise ahead of today's bell.

But with the Q1 earnings season petering out, it is not hard to see why stocks are back near record highs. S&P500 firms are now tracking annual profit growth of some 7.4% for the quarter - higher than expectations at the start of the year. Excluding the energy sector, that pace is now in double digits and estimates for the equivalent quarter next year are as high as 15%.

On Monday, Treasury yields were generally steady and the dollar mostly flat.

In Europe, macro markets will keep half an eye on the euro group finance ministers meeting in Brussels - where national budgets, competitiveness and banking and capital markets union are being discussed.

Danish shipping giant AP Moeller-Maersk stood out as its shares jumped 7.1%, boosted by a rise in freight rates amid higher trade volumes and the Red Sea crisis.

Key diary items that may provide direction to U.S. markets later on Monday:

* New York Federal Reserve's April inflation expectations survey

* Federal Reserve Board Vice Chair Philip Jefferson and Cleveland Fed President Loretta Mester speak

* Eurogroup finance ministers meet in Brussels, European Central Bank board member Piero Cipollone attends

* US Treasury auctions 3-, 6-month bills

(By Mike Dolan, editing by Ed Osmond [email protected])