The world stock markets were headed for a lukewarm end to the week after seven weeks on the rise and the dollar was holding firm after higher-than-expected U.S. inflation hit bets on how soon and how often the Federal Reserve will cut interest rates.
MSCI’s world equity index was down 0.1% and stable for the week, after a strong advance for most of the first quarter of the year.
The dollar index, which compares the dollar to a basket of six major currencies, was trading flat at 103.38 after Thursday’s rally, heading for its best week since January.
Caution took over the atmosphere after a higher-than-expected increase in producer prices in the United States on Thursdaywhich added to strong consumer inflation data earlier in the week.
The yield on benchmark US Treasury bonds, which influence the cost of debt globally, remained close to the 4.3% level touched in the previous session for the first time this month, after its biggest jump in three months .
“Price pressures appear more stubborn and the disinflation process is taking longer than expected,” said Capital.com’s Kyle Rodda. This, he added, “raises the specter of a possible air pocket for technology-driven advances” in US and global stock indices.
However, US stock futures pointed to a slightly bullish open after the S&P 500 fell 0.29% on Thursday, weighed down by the semiconductor sector.
Elsewhere, Japan remained in the focus of global markets as speculation mounts that the Bank of Japan will abandon its ultra-loose monetary policy at its meeting next week.
However, the strength of the yen was outweighed by the resurgence of the dollar, which gained 0.2% to 148.8 units, continuing its recovery from the low of 146.48 recorded a week ago.
The euro extended the previous drop to $1.087, after reaching a two-month high of $1.0980 a week ago.
Crude oil prices fell more than 0.5% due to some profit-taking after the increases recorded this week due to the sharp decline in crude oil and fuel inventories in the United States, the drone attacks on Russian refineries and the increase in energy demand forecasts.
Source: Ambito
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