Global Markets: World shares little changed ahead of US inflation data

Amotiv

14/05/2024 10:14

(Updates at 0855 GMT)
    By Tom Westbrook
       SINGAPORE, May 14 (Reuters) - World shares marked time
on Tuesday and were still just shy of record highs ahead of
highly anticipated U.S. inflation data, while Japanese bonds
were squeezed as the central bank pulled back a little on its
bond buying programme. 
    MSCI's world share index was flat on the day but remained
just 0.35% below mid-March's all time high. National and
region-wide share benchmarks in Europe  .STOXX , many at or
around record territory, were steady, as were U.S. S&P 500
futures.  ESc1   .EU  
    A broadly positive first quarter-earnings season has helped
stock markets in recent weeks, but investors this week have been
cautious ahead of important U.S. inflation data.  
    The U.S. producer price index due at 1230 GMT is Tuesday's
main macroeconomic event, though it will likely be overshadowed
by Wednesday's consumer inflation data numbers, one of the major
data points of the month. 
    "Today's a warm up, but tomorrow's U.S. CPI is what people
are waiting for," said Jan von Gerich, chief strategist at
Nordea.     
    Expectations are for core CPI to slow from an annual 3.8% in
March to 3.6% for April. Investors will be watching to see
whether some upside surprises in the first quarter were a blip
or a worrying trend that could force the Federal Reserve to keep
rates elevated throughout this year. 
    "I think that expectations (for hotter inflation) have risen
and so it will be hard to beat them. You've had three upside
surprises in a row and so if we come in line with expectations,
then rates will fall," von Gerich said.  
    The benchmark 10-year U.S. Treasury yield  US10YT=RR  was
last at 4.473%, a whisker lower on the day, down from mid-
April's five-month high of 4.729%, but still sharply up from the
3.899% at which it started the year.
        A survey released on Monday by the New York Fed showed
Americans see inflation a year from now at 3.3%, higher than
they did a month earlier. 
    British government bonds, or gilts, slightly outperformed
European peers after data showing British wages grew by more
than expected, but other figures suggested the labour market was
losing some inflationary heat.
    The British 10-year yield was 2 basis points lower at
4.154%, Germany's was flat at 2.488%.  GB10YT=RR   DE10YT=RR 
 GB/   GVD/EUR  
    In company news, Delivery Hero  DHER.DE  soared 20%, on
track for its biggest one-day gain since December 2019, after
Uber  UBER.N  announced a $1.25 billion deal to take over its
foodpanda food delivery business in Taiwan and buy new shares in
the German firm.
        
    Anglo American  AAL.L  laid out a strategy update that
includes exploring options for its steelmaking coal, nickel and
platinum businesses, as it fends off a takeover bid from BHP
 BHP.AX .      
    Also still to come on Tuesday, Alibaba  BABA.N   9988.HK  is
expected to report results and Federal Reserve Chair Jerome
Powell is due to speak at 1400 GMT.  

    HANG SENG SURGES
    In China, Hong Kong's Hang Seng index  .HSI  is up 30% from
January's lows and has surged nearly 20% in a month as money has
flowed in steadily from mainland buyers.
    Investors have welcomed news China will issue one trillion
yuan in special bonds as a harbinger of spending, while weak
lending data also shows monetary easing is reaching its limit.
Hang Seng volumes last week were the largest in 17 months.
        "Some of my clients are asking me every day what to buy,
when to buy because they still have an underweight position in
Hong Kong stocks," said Steven Leung, executive director at
brokerage UOB Kay Hian in Hong Kong.
        "I think this situation can continue for a while."
    Also catching the eye in Asia, benchmark 10-year Japanese
government bond yields  JP10YTN=JBTC  rose two basis points to
0.96%, the highest yield since November, a day after Japan's
central bank unexpectedly cut the amount of bonds it offered to
buy in a regular purchase operation.
    The gap, however, with U.S. yields remains hundreds of basis
points and wide enough to keep the frail yen under pressure.
    The yen traded as soft as 156.4 to the dollar  JPY=EBS . The
euro  EUR=EBS  was steady at $1.0786.  FRX/  
    Brent crude futures  LCOc1  were down 0.3% $83.08 a barrel
and spot gold  XAU=  was up a touch at $2,339 an ounce.  O/R 
 GOL/  

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World FX rates YTD    http://tmsnrt.rs/2egbfVh
Global asset performance    http://tmsnrt.rs/2yaDPgn
Asian stock markets    https://tmsnrt.rs/2zpUAr4
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 (Editing by Lincoln Feast and Bernadette Baum)
 ((tom.westbrook@tr.com; +65 6973 8284;))
 
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