World stocks eye fourth week of gains on Fed outlook

World stocks have headed for a fourth straight week of gains as investors scale back views on how far US interest rates and inflation can climb, while oil has recouped some of the previous week’s losses.

Reuters reported a slight easing of inflation readings drove global stocks higher and capped a rising dollar this week, though a string of Fed speakers dampened expectations of the central bank going slow on further policy tightening.

“Inflation seems to have turned and that was positive, the growth stocks are outperforming again,” said Matthias Scheiber, global head of portfolio management for multi-asset solutions at Allspring.

“I wouldn’t be surprised if we have a good finish into the weekend,” he added, though he said investors remained cautious.

MSCI’s world stock index was up 0.1 per cent on Friday and was showing a 1.8 per cent rise on the week.

S&P futures gained 0.53 per cent after the S&P index closed down 0.07 per cent.

European stocks rose 0.35 per cent and were heading for weekly gains of more than 1.0 per cent. Britain’s FTSE climbed 0.56 per cent and was eyeing a near-1 per cent rise on the week.

Investors are focused on further inflation data later on Friday, with the publication of the University of Michigan’s preliminary survey of consumers for August.

Odds of a 75 basis points US hike in September were as high as 68 per cent earlier in the week, but are now about 34 per cent, where they were a week ago.

However, the president of the San Francisco Federal Reserve said on Thursday that she would be open to a hike of more than 50 basis points if necessary, while the presidents of the Chicago and Minneapolis Feds made hawkish comments on rate rises.

The dollar gained 0.24 per cent against a basket of currencies while the euro lost 0.26 per cent to $US1.0289. Sterling dropped 0.36 per cent against the dollar to $US1.2170 after data showing British GDP fell 0.1 per cent on the quarter.

US 10-year Treasury yields were trading at 2.888 per cent after hitting a near-three-week high of 2.906 per cent.

Benchmark German 10-year government bond yields rose above 1 per cent for the first time in two weeks.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.16 per cent, heading for a weekly gain of 1.0 per cent.

Hong Kong’s Hang Seng index rose 0.46 per cent, but Chinese blue-chip stocks dipped 0.1 per cent.

Japan’s Nikkei was the major outlier, surging 2.62 per cent to its highest level since January as markets reopened following a national holiday.

Brent crude was headed for a weekly climb of more than 3.0 per cent, recouping part of last week’s 14 per cent tumble, as recession fears eased, though an uncertain demand outlook capped gains.

Brent crude oil futures rose 0.41 per cent to $US100.01 a barrel. US West Texas Intermediate crude gained 0.18 per cent to $US94.52.

Spot gold was down 0.1 per cent at $US1,787 an ounce.

US 10-year Treasury yields were trading at 2.888 per cent after hitting a near-three-week high of 2.906 per cent.

Benchmark German 10-year government bond yields rose above 1 per cent for the first time in two weeks.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.16 per cent, heading for a weekly gain of 1.0 per cent.

Hong Kong’s Hang Seng index rose 0.46 per cent, but Chinese blue-chip stocks dipped 0.1 per cent.

Japan’s Nikkei was the major outlier, surging 2.62 per cent to its highest level since January as markets reopened following a national holiday.

Brent crude was headed for a weekly climb of more than 3.0 per cent, recouping part of last week’s 14 per cent tumble, as recession fears eased, though an uncertain demand outlook capped gains.

Brent crude oil futures rose 0.41 per cent to $US100.01 a barrel. US West Texas Intermediate crude gained 0.18 per cent to $US94.52.

Spot gold was down 0.1 per cent at $US1,787 an ounce.

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