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US inflation data approaches, Amazon talks cloud growth slowdown, Japan’s central bank continues to diverge. — Liza TetleyAnother inflation [View in browser]( [Bloomberg]( US inflation data approaches, Amazon talks cloud growth slowdown, Japan’s central bank continues to diverge. — [Liza Tetley]( Stagflation risk Another [inflation indicator is due to drop today,](bbg://news/stories/RTS7GMDWLU68) one that has the potential to shake markets if it doesn’t cooperate with the “one-and-done” narrative for coming rate hikes. Bloomberg Economics expects the PCE deflator for March to show that both core services and Federal Reserve Chair Jerome Powell’s preferred “supercore” inflation measure accelerated from February. This paired with wage growth could cement in bets of a May FOMC hike and potentially more ahead. After a [weak GDP print Thursday]( showed the US economy was slowing even pre-banking crisis, today’s data could point toward a higher risk of stagflation, where the economy slumps while inflation sticks at a pace well above the Fed’s 2% target. Amazon cools In a worrying sign for technology spending, [Amazon issued a warning that growth in its cloud computing business is continuing to slow](. Investor optimism around the tech giant’s results beat was tempered by a reality check during a conference call disclosure that sales growth at Amazon Web Services, the main source of the company’s operating income, had slowed further in April. Growth has also slowed in its core e-commerce business since the pandemic-era boom. Amazon shares, which had jumped initially in extended trading, were lower in premarket trading on Friday. Japan stimulus Continuing its divergence from other central bank tactics in the fight against inflation, the [Bank of Japan has scrapped guidance on future interest rate levels, and left its rock-bottom benchmark rate]( and asset purchase settings unchanged. The decision to keep stimulus in place stands in stark contrast to global peers which are tightening policy to weaken inflation. BOJ governor Kazuo Ueda reiterated his commitment to continue easing with yield curve control, though said the policy could be changed if needed. “We’re not starting the review with the aim of normalizing,” he said. “But it’s not zero chance we begin normalizing during the review period.” Markets drop US stock futures are lower today, with the tech-heavy Nasdaq down 0.3% and S&P 500 futures falling 0.4% as of 5:30 a.m. in New York as investors digest earnings and await key inflation data. Treasuries bounced, while gold prices edged lower. Oil prices were also set to end the week lower. The dollar, meanwhile, rose. Coming up… We have that crucial PCE data coming up at 8:30 a.m. today, accompanied by personal income figures for March that will indicate the pace of wage growth. At 10 a.m., we’ll get the latest reading on the University of Michigan consumer sentiment gauge. On the corporate earnings front, we have Chevron, Exxon, Colgate-Palmolive, Aon, and PetroChina all reporting. What we’ve been reading Here’s what caught our eye over the past 24 hours: - A South African executive has been ordered to pay the highest-ever civil [monetary penalty in any US Commodity Futures Trading Commission case]( - US hedge fund Elliott Investment Management is said to [build stake in Germany’s Software AG]( - The [euro zone avoids a recession]( by growing in the first quarter, but inflation picks up - [Lloyds joins UniCredit in redeeming its additional tier 1](bbg://news/stories/RTTHHUDWRGG0) bonds in full - [UK businesses plan to raise prices for consumers]( over the next 12 months - China’s [probe into US consultancy Bain & Company](could spook foreign investors - How Randi Weingarten landed at the [center of America’s political fights]( And finally, here’s what Garfield’s interested in this morning While the bond market’s rebound this year shows increasing confidence a global wave of rate hikes will tame inflation, nagging concerns remain. The world’s biggest money managers are becoming more deeply divided over whether cost pressures will fade away. Allianz Global Investors reckons central banks will win the inflation battle;  BlackRock Inc. is among those skeptical of rate-cut bets. Former Treasury Secretary Lawrence Summers weighed in, saying a “meaningful” economic downturn is probably needed to tame inflation. In another sign of sub-surface cracks in the bond market, hedge funds set the biggest short on record against benchmark 10-year futures. Funds also extended overall bearish bets for a fifth-straight week. That stance contrasts with Wall Street veteran Bob Michele, who anticipates a flattening of the yield curve to 3% for securities maturing in two through 30 years. The Federal Reserve is still expected to raise its benchmark rate by a quarter-point next week, while the European Central Bank is talking about another half-point increase — and then maybe some more. Goldman Sachs sees the Bank of England also hiking rates, to keep it close to the Fed. The conundrum this poses for investors got sharper when the latest first-quarter GDP update showed the US in the “worst of both worlds.” Growth slowed to a 1.1% annualized pace while inflation accelerated. Traders promptly boosted bets on stickier inflation. The big fear is a bout of stagflation could be on the way. In response, some funds, including Australian pension managers, are turning to commodities for protection. — [Garfield Reynolds]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](