Global Markets: Global stock index edges up, dollar falls after U.S. inflation reading

Applied Energetics

26/01/2024 15:59

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      World stocks hover near 2-year highs
    

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      Oil on track for second consecutive weekly gain 
    

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      U.S. dollar eases, Treasury yields rise
    

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      Graphic: World FX rates http://tmsnrt.rs/2egbfVh 
    

  
 (Updates prices at 10:31 a.m. ET/1531 GMT)
    By Sinéad Carew and Marc Jones
       NEW YORK/LONDON, Jan 26 (Reuters) - MSCI's global stock
index was edging higher while Wall Street indexes slipped on
Friday and the dollar fell after the U.S. Federal Reserve's
favored inflation reading showed moderating prices in line with
expectations for December.
    Treasury yields rose after the data suggested that the Fed
may be able to engineer a soft landing for the U.S. economy.
    The personal consumption expenditures (PCE) price index
increased 0.2% last month after an unrevised 0.1% drop in
November, the Commerce Department's Bureau of Economic Analysis
said. In the 12 months through December, the PCE price index
increased 2.6%, matching November's unrevised gain.
    Still, pending U.S. home sales shot up in December by the
most since June 2020, indicating prospective buyers may be
getting drawn from the sidelines by stabilizing mortgage rates.
    “I think this gives the Fed cover to say what it's been
saying, which is, ‘hey, we have to be data-driven’ and I don't
know that we're seeing much that would point towards a lower
interest rate. They (the Fed) are not going to do anything if
the data tells them to stay.” said Kim Forrest, chief investment
officer at Bokeh Capital Partners in Pittsburgh.
    “But I also don't see anything that's pointing to a higher
interest rate, and that's good enough for now.”
    The MSCI world equity index  .MIWD00000PUS , which tracks
shares in 49 nations, gained 0.14%, hitting its highest level in
almost two years. 
    On Wall Street, at 10:31 a.m. the Dow Jones Industrial
Average  .DJI  was up 88.80 points, or 0.23%, to 38,137.93,
while the S&P 500  .SPX  was up 4.11 points, or 0.08%, to
4,898.27 and the Nasdaq Composite  .IXIC  was down 8.26 points,
or 0.05%, to 15,502.24. 
    Europe's  .STOXX  equity index rose 1.05% and was heading
for a 3% weekly gain, which would be its biggest since the week
starting Oct. 30.
    This was after the European Central Bank (ECB) signaled on
Thursday that it could cut rates by April. While ECB chief
Christine Lagarde said it was "premature" to discuss easing,
money markets priced an almost 85% chance of a first quarter
point rate cut in April  EURESTECBM3X4=ICAP .  GVD/EUR     
    In currencies, the dollar index  =USD , which tracks the
greenback against a basket of currencies of other major trading
partners, was down 0.12% on the day.
    The dollar rose 0.31% against the yen to 148.11  JPY=  but
the euro  EUR=  was up 0.1% at $1.0856.      
    In Treasuries, trading was volatile after the data but most
recently the yield on benchmark 10-year Treasury notes
 US10YT=RR  was up to 4.1624% from its U.S. close of 4.132% on
Thursday. The two-year yield  US2YT=RR , which rises with
traders' expectations of higher Fed fund rates, touched 4.3551%
compared with a U.S. close of 4.314%. 
    In commodities, oil prices were heading for a second
straight weekly gain. U.S. crude was up for the day so far as
positive U.S. economic growth and signs of Chinese stimulus
boosted demand sentiment, while Middle East supply concerns
added further support.
    U.S. crude  CLc1  ticked up 0.12% to $77.46 a barrel. Brent
crude  LCOc1  rose to $82.62 per barrel.    
    In Asia, MSCI's broadest index of Asia-Pacific shares
excluding Japan  .MIAPJ0000PUS  closed down 0.4% but snapped a
three-week losing streak for a 1.6% weekly rise. 
    China's CSI blue-chip index  .CSI300  dipped 0.3% on Friday
but scored a near 2% weekly gain after three weeks of losses. 
    Investors poured almost $12 billion into Chinese equity
funds in the week to Wednesday, a BofA Global Research report
calculated on Friday. That marks the largest inflow since 2015
and the second largest ever.  

 (Reporting by Sinéad Carew in New York, Marc Jones in London,
Amruta Khandekar in Bengaluru; Editing by Alex Richardson and
Mark Potter)
 ((sinead.carew@thomsonreuters.com; +13322191897))
 
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