🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

GLOBAL MARKETS-World stocks hit highest in a week as inflation worries ebb

Published 03/11/2021, 05:50 PM
Updated 03/11/2021, 06:00 PM
© Reuters.
EUR/USD
-
USD/JPY
-
UK100
-
FCHI
-
DE40
-
IT40
-
JP225
-
DX
-
LCO
-
ESZ24
-
CL
-
KS11
-
SSEC
-
MIAPJ0000PUS
-
MIWD00000PUS
-

* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Ritvik Carvalho
LONDON, March 11 (Reuters) - World stocks rose to their
highest in just over a week on Thursday after a report on U.S.
consumer prices calmed investor nerves about inflation and
lifted the Dow Jones Industrial Average to a record close.
European stocks climbed, with the pan-European STOXX 600
index reaching a one-year peak and up 0.3% on the day. Britain's
FTSE 100 index rose 0.14% .FTSE , France's CAC 40 0.2% .FCHI ,
and Italy's FTSEMIB .FTMIB 1%. Germany's DAX .GDAXI traded
flat. .EU
MSCI's All Country World Index, which tracks stocks across
49 countries, rose to its highest in just over a week, up 0.5%
on the day. .MIWD00000PUS
Earlier in Asia, an index of regional stocks excluding Japan
.MIAPJ0000PUS rose 1.7%, led by a 2.3% surge in South Korea's
Kospi .KS11 , and was on track for its first three-day advance
in three weeks.
China's Shanghai Composite .SSEC rallied 1.9%, helped by
local lending data. Japan's Nikkei 225 .N225 gained 0.5%.
E-mini futures for the U.S. S&P 500 index gained to their
highest in two weeks, up 0.7% ESc1 .
Relative calm in the Treasuries market also helped risk
sentiment, with the benchmark yield settling around 1.5% after
shooting to a one-year high above 1.6% last week as investors
worried about the U.S. economic recovery running too hot.
"If we look at history, we see that when yields have gone
up, after a while equity markets have generally been okay," said
Justin Onuekwusi, portfolio manager at Legal & General
Investment Management. "The only time you really see both
equities and bonds sell off is in periods when there is a
significant inflation scare."
At this point with unemployment still so high, it is hard to
see inflation becoming a problem, Onuekwusi said. Higher yields
could be read as showing "that we are actually getting out of
the quagmire we have been in."
"And there is a natural yield cap -- central banks will
step in when rates move too quickly. They are differentiating
between levels of yield and speed at which yields move."
The European Central Bank sets its policy on Thursday and is
likely to signal faster money printing to keep a lid on
borrowing costs but stop short of adding firepower to its
already aggressive pandemic-fighting package. The U.S. Labor Department said its consumer price index rose
0.4% in February, in line with expectations, after a 0.3%
increase in January. Core CPI, which excludes volatile food and
energy components, edged up 0.1%, just shy of the 0.2% estimate.
Analysts largely expect inflation to pick up as vaccine
rollouts lead to a reopening of the economy, but worries persist
that additional stimulus in the form of a $1.9 trillion
coronavirus relief package set to be signed by U.S. President
Joe Biden could overheat the economy. Investors will now eye an auction of 30-year debt on
Thursday, seeking to cover massive shorts. A weak seven-year
auction in late February helped fuel inflation concerns and sent
yields higher. "Rises in U.S. bond yields appear to have subsided a bit
after the 10-year yield has reached 1.5%, even though many
investors remain cautious before the Fed's policy meeting," said
Naoya Oshikubo, senior economist at Sumitomo Mitsui Trust Asset
Management.
"The Fed has ratcheted up its rhetoric on bond yields
lately. The reality is, the economy is in a K-shaped recovery,
with the service sector still in difficult conditions and the
Fed would probably not want to let real interest rates rise."
The dollar remained weaker following the economic data. The
dollar index =USD fell to its lowest in a week, 91.547.
The euro, on the other hand, rose to its highest in a week,
at $1.19685 EUR= . The safe-haven yen traded flat at 108.425
per dollar JPY= . FRX/
Oil prices resumed their climb following two days of
declines, after the Energy Information Administration reported a
storage grew more than expected. O/R
U.S. crude futures CLc1 rose 1.3% to $65.25 per barrel.
Brent crude futures LCOc1 rose 1.1% to $68.68 per barrel.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Emerging markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.