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World stocks inch higher ahead of U.S. inflation data

Reuters  |  LONDON 

By Ritvik Carvalho

(Reuters) - World shares inched higher on Tuesday, eking out limited gains as investors kept a wary eye on a U.S. reading later in the day that could offer clues on the pace of Federal Reserve interest rate hikes this year.

The index of stocks, which tracks shares in 47 countries was up less than 0.1 percent by 1149 GMT.

The index has recovered about half its losses during a shakeout in stocks in February. The selloff came on the back of strong U.S. wage numbers, which investors feared might feed into and push the U.S. towards a faster pace of monetary tightening.

Raising its global growth forecasts, the (OECD) said the Fed would probably have to raise interest rates four times this year as picks up.

U.S. (CPI) data is due at 1230 GMT.

"Today's CPI data is likely to add further colour to the U.S. picture, however it probably won't add any further clarity to the overall outlook puzzle, given that the Fed doesn't use CPI as its benchmark," said Michael Hewson, at in

"Nonetheless it is still a useful gauge in establishing when and how the price pressures we've been seeing build up in U.S. supply chains start to filter down into the wider "

While the is a popular barometer of economic health, it is not the primary gauge the Fed uses to measure Instead, the Fed uses the personal consumption expenditures (PCE) index.

The pan-European fell 0.1 percent, trimming earlier gains.

Earlier in Asia, MSCI's broadest index of shares outside was up 0.2 percent after spending much of the day swerving in and out of negative territory.

The index surged 1.5 percent on Monday following firm U.S. jobs numbers on Friday, while low wage growth eased concerns about and faster rate hikes.

But a mixed performance by U.S. shares overnight tempered the rally.

The and the Dow slipped on Monday as the U.S. tariffs signed into weighed on industrials, while a rise in tech stocks boosted the Nasdaq to a new record high. Wall Street was set to open higher on Tuesday.


In currencies, the fell over half a percent to a two-week low against the dollar, pressured by a political scandal engulfing It also lost ground to the euro.

The yen tends to suffer in an environment when riskier and higher-yielding assets are bid but strategists said in a note that a further deterioration in the political situation that affected the position of Abe, could see the yen "forcefully return towards its previous upward trend."

The dollar index, which measures the greenback against a basket of currencies, was up 0.1 percent.

"The broader story remains that of U.S. normalization in the backdrop of an improving and a further decline in currency market volatility would only fuel more risk taking appetite," said Commerzbank's Thu Nguyen.

Slovakia's 10-year yield rose as much as five basis points and the cost of insuring exposure to its debt hit the highest in almost three months as the government inched towards collapse.

The benchmark 10-year note yield stood little changed at 2.879 percent.

U.S. crude futures were down 0.2 percent to $61.27 per barrel. Brent also fell 0.3 percent to $64.77 per barrel.

Spot gold fell 0.3 percent to $1,318.78 per ounce.

(Reporting by Ritvik Carvalho; additional reporting by in and markets team; Editing by Janet Lawrence)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 13 2018. 17:49 IST