Friday 14.35 BST
What you need to know
- S&P 500 sets new record in opening trade
- Equities test recent record peaks in Europe
- Dollar slips after narrow miss from consumer price inflation data
- CPI rose by the biggest margin in 8 months helped by stronger gasoline prices
- Gold heads for first weekly gain in five weeks
- Brent crude up 2%
Leading quote
“This consumer price index result paints a confusing picture for the Federal Reserve, says Stephen Gallo, European head of FX strategy at Bank of Montreal.”
“These numbers today will probably create a more reluctant feeling on the part of some policymakers — not so much about a December rate hike but about the pace and degree of rate hikes in 2018, barring a substantial rebound in inflation pressures. In the broad value of the the dollar, we expect these numbers to solidify near-term resistance below the October high, and we see good near-term support for the euro in the $1.1750 to $1.1800 range.”
Hot topics
The dollar is slipping after consumer price inflation data only narrowly missed forecasts, but managed to come in at their highest level in eight months. Meanwhile, the S&P 500 is at a new record high in opening trade.
The data did little to upend expectations for the pace of the Federal Reserve’s rate tightening cycle in 2018, but added to the existing uncertain perceptions over the process.
The index tracking the world’s reserve currency is down 0.3 per cent at 92.782 after the numbers. The euro is up 0.4 per cent at $1.1871 and the pound is 0.4 per cent higher at $1.3321.
Sterling is up 0.5 per cent at $1.3318, while the euro is flat at $1.1829. The yen is 0.5 per cent higher at $111.76.
The CPI data have assumed more importance after minutes from the Fed’s September meeting took a dovish tone this week, pointing to sustained low inflation as a concern of policymakers. The reading was the highest such rise in eight months, driven by higher gasoline prices, helping offset any pressure the dollar may have faced after the narrow miss.
European stocks are trading around this week’s notable highs but are mixed. London’s FTSE 100 is slipping back from its record closing high and Frankfurt’s Xetra Dax 30 has retaken the 13,000-point mark it touched this week for the first time. Meanwhile, Asian stock indices are round some of their best levels in a decade as the bull run for global stock markets continues.
Equities
The S&P 500 is up 0.2 per cent at a new peak of 2,555.55 as Wall Street’s record-breaking run resumes.
The FTSE 100 is down 0.3 per cent at 7,529.40, having set a closing high of 7,556.24 on Thursday. The slip is broad, with all of the index’s sectors falling back after the record. It is also in line with a strengthening pound, with sterling up 0.3 per cent after pressure on the currency added support to the stock rally over the previous session.
Frankfurt’s Xetra Dax 30 is down 0.1 per cent at 12,969.0, again failing to hold the 13,000-point level it breached on Thursday.
The international Euro Stoxx 600 is up 0.1 per cent, with resource and technology stocks leading the index.
Australia’s S&P/ASX 200 is up 0.3 per cent, its highest close since late June.
In Tokyo, the Topix extended Thursday’s at its highest close in a decade to rise a further 0.5 per cent.
Fixed income
The yield on 10-year US Treasuries is down 4 basis points at 2.2837 after the US data as investors buy the debt. The 2-year yield is flat at 1.497.
Commodities
Oil prices are stronger with international benchmark Brent rising 1.8 per cent to $57.27 a barrel after settling 1.2 per cent lower the previous session. West Texas Intermediate is also up 1.8 per cent to $51.53 a barrel after a 1.2 per cent dip on Thursday.
Gold is up 0.6 per cent to $1,300.78, heading for its first weekly gain since early September.
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