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Stock markets mostly rose on Tuesday on the eve of key US inflation data that will show whether consumer prices have cooled further from decades-high levels. online news
The inflation figures on Wednesday will fuel speculation about whether the US Federal Reserve will further lift interest rates, after data last week showed a healthy rise in new US jobs.
The central bank has increased rates in efforts to battle inflation but investors fear the monetary tightening could tip the world’s largest economy into recession.
The IMF slightly lowered its global growth forecast to 2.8 percent on Tuesday but raised the outlook for the United States to 1.6 percent, up 0.2 percentage points.
A stronger economy can give the Fed more room to raise rates.
Wall Street was mixed approaching midday, with the Dow rising, the S&P 500 flat and the tech-rich Nasdaq down.
European markets closed higher, with the Paris CAC 40 reaching a record 7,403.67 points before paring down some gains, in a sign that investors are in a buying mood again following last month’s scare over the global banking sector.
Asian indices finished mostly higher.
“Market participants are adopting a wait-and-see stance in front of that (inflation) report and the earnings reports from several major banks on Friday,” said Briefing.com analyst Patrick O’Hare.
The US Consumer Price Index for March will be released on Wednesday followed by wholesale prices the next day. The CPI eased to six percent in February.
Several analysts expect the Fed to raise its rate by 0.25 percentage points at its May meeting.
“The ongoing discussion of when the Federal Reserve will cut rates remains somewhat premature,” said Clifford Bennett, chief economist at ACY Securities.
“The only real question remains just how high the Fed will go?”
Investors are also preparing for the start of first-quarter earnings season, with banking titans JPMorgan and Citigroup among those reporting on Friday.
The corporate results will be closely watched following the recent banking crisis that shook confidence in the financial sector.
In Asia, data out of China showed consumer prices rose less than expected in March and factory costs dropped, suggesting there remains some weakness in the world’s second-largest economy even as it reopens after the lifting of Covid restrictions.
It does, however, provide the People’s Bank of China with room to unveil further growth-boosting measures.
“Economic recovery is on track but not strong enough to push up prices,” said Zhang Zhiwei at Pinpoint Asset Management.
“This suggests the economy is still running below its potential. There is room for fiscal and monetary policies to boost growth further,” he said.
Elsewhere, bitcoin traded above $30,000 for the first time in 10 months following a recent run higher.
Key figures around 1545 GMT
New York – Dow: UP 0.2 percent at 33,668.76 points
London – FTSE 100: UP 0.6 percent at 7,785.72 (close)
Paris – CAC 40: UP 0.9 percent at 7,390.28 (close)
Frankfurt – DAX: UP 0.4 percent at 15,655.17 (close)
EURO STOXX 50: UP 0.6 percent at 4,333.29 (close)
Tokyo – Nikkei 225: UP 1.1 percent at 27,923.37 (close)
Hong Kong – Hang Seng Index: UP 0.8 percent at 20,485.24 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,313.57 (close)
Euro/dollar: UP at $1.0911 from $1.0865 on Monday
Pound/dollar: UP at $1.2418 from $1.2384
Euro/pound: UP at 87.88 pence at 87.70 pence
Dollar/yen: DOWN at 133.58 yen from 133.59 yen
West Texas Intermediate: UP 1.7 percent at $81.10 per barrel
Brent North Sea crude: UP 1.2 percent at $85.18 per barrel
burs-lth/bp
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