Wall Street is set to open slightly higher on Tuesday morning on the eve of the release of US inflation figures, which could further shift interest rate expectations.

Half an hour before the opening, futures contracts on New York indices are trading between 0.2% and 0.3% higher, pointing to a slightly upbeat start to the session.

Pending the kick-off of the earnings season, scheduled for Friday, market direction is likely to be determined by the release of consumer price data tomorrow.

After the 'rally' at the start of the year, which saw the S&P 500 index climb by over 9%, investors are once again faced with the risk of a reawakening of inflation in the USA, with the corollary risk of a reassessment of their expectations in terms of monetary policy.

Higher than expected figures would thus confirm the more cautious rhetoric voiced by Federal Reserve members in recent weeks regarding the need for an easing of monetary policy.

According to César Perez Ruiz, Head of Investments at Pictet Wealth Management, "The inflation figures could call into question the scenario of three Fed rate cuts this year, which the market was still favouring last week".

The statistics are all the more eagerly awaited given that the latest indicators, which were much better than expected, have led market participants to revise downwards the probability of a rate cut as early as June.

According to CME Group's Fedwatch barometer, the probability of a rate cut in June is now estimated at just 51%, compared with 61% a week ago.

On the bond market, the yield on ten-year Treasuries dropped by more than four basis points to below 4.38%, while the dollar lost some ground against the euro as consumer price figures were awaited.

The euro climbed back to close to 1.0880 dollars.

The oil market fell back after its recent rally, which had taken it to five-month highs. US light crude is down 0.3% at $86.2.

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