Global stocks stop at inflation. Fixed oil in Ukraine

A broker looks at financial information on computer screens at the IG Index, the trading floor in London, Britain, February 6, 2018. REUTERS/Simon Dawson

LONDON (Reuters) – Global stocks were little changed on Wednesday, pausing after a six-day slump amid a mixed inflation picture, while faltering peace talks between Russia and Ukraine kept oil near recent highs.

Tough moves from the world’s major central banks as Russia’s invasion of Ukraine increased inflationary pressures that have weighed on stock markets since the start of the year, with the MSCI Global Index (.MIWD00000PUS) by 10%.

Data on Wednesday showed no slowdown in Britain after inflation hit a 30-year high of 7%, although this came a day after a lower-than-expected reading in the US gave some traders hope that policy might be. Tighten more slowly.

At 0711 GMT, the MSCI World Index settled at 689.80 points, weighed by declines across most of the leading European indices. Britain’s FTSE 100 Index (.FTSE) It decreased by 0.1%.

“Sharp increases in a generation have destabilized financial markets, as investors digest the bleak prospect of an even tougher rate hike,” said Susanna Streeter, senior investment and markets analyst, Hargreaves Lansdowne.

Overnight in Asia, much weaker-than-expected import data from China weighed on expectations, but added to views that Beijing could loosen policy further, helping MSCI’s broadest index of Asia-Pacific stocks outside Japan. (MIAPJ0000PUS.) It climbs 0.6%.

Japan also posted weak machine orders data, although stocks closed higher on the back of US inflation data. US stock index futures indicated a gain of 0.5% at the open.

Data published on Tuesday showed that monthly US consumer prices rose by their most in 16-1/2 years in March as the war in Ukraine boosted the cost of gasoline to record levels, bolstering the case for a 50 basis point Fed rate hike. Federal. next month.

However, monthly core inflation pressures eased as commodity prices, excluding food and energy, fell by the most in two years. Read more

The data sent US yields lower on Tuesday, snapping seven straight sessions of gains, although they recovered a bit of strength late in the day and into Wednesday’s trading.

The yield on the 10-year Treasury was 2.7270%, compared to a more than three-year high of 2.836%, before the inflation data.

The two-year yield was 2.4241%.

The moves in yields “give an indication of statements that US inflation has likely peaked or is very close to it,” said Clara Cheung, strategist at JPMorgan Asset Management.

“While this is unlikely to change the Fed’s course from a 50 basis point hike in May, if inflation continues on that path, there will be less pressure on them to be overly aggressive in the second half of the year.”

In European markets, the German 10-year bond yield regained some of the previous day’s decline, up around 7 basis points.

Oil prices held steady near recent highs, with Brent crude futures settling at $104.59 a barrel after Russian President Vladimir Putin said the intermittent peace negotiations with Ukraine were “again back into a stalemate for us”.

Corn futures are down 0.8% but still close to an 11-year high last month.

Gold was flat at $1,967 an ounce.

In the currency markets, Putin’s comments were a major driver with the euro up 0.1% against the dollar, but just above a five-week low. The dollar index was flat

The New Zealand dollar had a busy day, as it rose to $0.6901 and fell to $0.6808 after the Reserve Bank of New Zealand raised interest rates by 50 basis points – its biggest rise in more than two decades – but eased it. rate forecast. It was last down 0.8% to 0.67975.

The Bank of Canada meets later on Wednesday and is also expected to deliver a sharp rally. Read more

Editing by Christopher Cushing and Kim Coogle

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