SYDNEY/NEW YORK - Global markets treaded water on Wednesday ahead of US consumer price data that could potentially lower the possibility for a rate cut this year, while investors waited to see if the earnings of big banks would match sky-high expectations.

US equity futures were slightly firmer in Asia, with S&P 500 futures up 0.1 percent and Nasdaq 100 futures up 0.2 percent. Japan's Nikkei gave up earlier gains to be off 0.1 percent, extending its losing streak to five days.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent. 

In other news that broke in Asia, the US Securities and Exchange Commission sued tech billionaire Elon Musk for having failed to timely disclose purchasing more than 5 percent of Twitter's common stock in 2022.

Overnight, US producer price data for December was surprisingly tame, with the core measure flat in the month. That restrained the US dollar and pulled short-term Treasury yields off their highs. The S&P 500 closed 0.1 percent higher.

Still, futures continued to price in just 29 basis points of easing from the Federal Reserve this year, with the first cut not fully priced in until September. While 10-year Treasury yields initially fell on the PPI data, they bounced back and ended the day just a tick lower than the high of 4.809 percent.

In Asia, the benchmark US yield was little changed at 4.786 percent on Wednesday.

Much is riding on the CPI data due later on Wednesday. Forecasts are centered on a small 0.2 percent rise in the core measure, with risks skewed to the upside. A strong reading of 0.3 percent or more could trigger another bout of selling in stocks and bonds.

"This CPI print is a pivot data point. A dovish print likely reignites the rally which is likely to get a boost from a strong earnings period," said analysts at JPMorgan in a note to clients.

"A hawkish print could see the 10Y yield make a run at 5 percent, increasing volatility across all asset classes, and continuing to pressure equities."

Investors are also gearing up for US fourth-quarter 2024 earnings, with results from some of the biggest US banks - including Citi and JPMorgan - due on Wednesday. Lenders were expected to report stronger earnings, fueled by robust dealmaking and trading.

In Europe, the spotlight is again on the UK after concerns about the country's fiscal outlook pummelled government bonds to 16-year lows. The local CPI report is due on Wednesday and is expected to show underlying inflation picked up to a monthly rate of 0.5 percent.

The pound slipped 0.1 percent to $1.2198, just a touch above a one-year low of $1.2099.

The euro held at $1.03, having rallied 0.6 percent overnight. The Japanese yen underperformed even in the face of a weaker US dollar, hovering at 157.95 per dollar after a 0.3 percent retreat overnight.

In the commodities market, oil prices were slightly higher after ending Tuesday more than 1 percent lower.

US crude rose 0.3 percent to $77.74 a barrel and Brent was 0.2 percent higher at $80.09.