Global stocks edged higher and the dollar dipped on Friday after US Federal Reserve officials said there would be no imminent move to tighten monetary policy in the world’s biggest economy. The bounce, extending a late recovery in the prior session, interrupted a three-day rout for stocks globally, amid market jitters over accelerating US inflation.
The MSCI World Index, a broad gauge of equity markets globally, was up 0.3 percent in early European trading, adding to Thursday’s 0.4 percent gains after a loss of more than 4 percent since the start of the week.
The STOXX Europe 600 Index was up 0.6 percent in early deals while the FTSE 100, Europe’s biggest index, was up 0.7 percent. The gains followed overnight strength in Asia, where Tokyo’s Nikkei jumped 2.3 percent, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.8 percent and Chinese blue chips rose 2.2 percent.
US stock futures pointed to a higher open on Wall Street, with S&P 500 futures up 0.6 percent and its Nasdaq peer up 0.8 percent. Among Fed speakers overnight, Governor Christopher Waller signalled rates would not rise until policymakers either see inflation above target for a long time or excessively high inflation.
”Inflation, it seems, matters less today than yesterday,” Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a note to clients. ”The buy-the-dip crowd were out in force,” suggesting that recent selling was ”a pullback within a bull market,” he said.
Looking ahead, traders will wait for the release of a fresh batch of US data including April retail sales, industrial production and capacity utilisation, while the Dallas Federal Reserve President is also set to speak.
In Europe, meanwhile, the European Central Bank is set to publish the accounts of its April meeting.
Benchmark 10-year Treasury yields were down fell by nearly 4 basis points overnight and eased further to trade at 1.6539 percent. After holding steady in Asia overnight, the US currency edged lower against a basket of its major peers, with the dollar index down 0.2 percent at 90.57, taking a breather after recent strong gains.
Gold was last up 0.3 percent at USD 1,832 an ounce, helped by the pullback in the dollar. Oil prices steadied around flat on the day as investors focused on high coronavirus cases in key consumer India and the return to action of a top US fuel pipeline network after being shut due to a cyber attack.
Brent crude was unchanged at USD 67.05 a barrel, while US West Texas Intermediate crude was up 0.1 percent at USD 63.88 a barrel.
In cryptocurrencies, bitcoin recovered to trade just above USD 50,000 on Friday, after plunging to a 2-1/2-month low of USD 45,700 in the previous session when a media report of a regulatory probe into crypto exchange Binance added to pressure from Tesla Inc chief Elon Musk reversing his stance on accepting the digital currency.
Much smaller rival dogecoin jumped as much as 20 percent to USD 0.52 after Musk said on Twitter that he was involved in work to improve the token’s transaction efficiency.