With investors now betting on both the U.S. Federal Reserve
and the European Central Bank lowering borrowing costs in June, Europe's Stoxx
600 (.STOXX), opens new tab index rose 0.4% in early dealings, extending a
record high.
Futures trading implied Wall Street's S&P 500 stock
index, which also hit a record in the previous session, would open slightly
higher later in the day .
Japan's Nikkei index (.N225), opens new tab jumped 1.9% to
hit a fresh all-time high, extending a surge of 7.9% the previous month when it
breached levels last seen in 1989.
Global stocks have been bursting through record levels as
traders expected a so-called 'Goldilocks' scenario, where inflation eases
without economic growth contracting. Recession fears in the U.S. have faded
while the sluggish euro zone economy has shown signs of picking up.
"The period of double-digit inflation from which we are
emerging is well and truly over," said Florian Ielpo, head of macro at
Lombard Odier in Geneva.
"The growth situation continues to improve."
U.S. personal consumer expenditures (PCE), the Fed's
preferred gauge for inflation, rose 2.4% in January from the same month a year
ago, the smallest annual increase in three years, data on Thursday showed.
Markets see a 76% probability that the Fed will start
cutting interest rates in June, with total easing of 82 basis points priced in
for this year .
In Europe, inflation in Germany, France and Spain have all
eased, mostly in line with expectations, which should bode well for eurozone
inflation data later on Friday.
A raft of global factory surveys are also due on Friday.
Those from Asia showed most economies struggled to claw their way out of
decline in February, with Japan squeezed by a steeper fall in demand while an
uneven recovery in China overshadowed some signs of improvement elsewhere in
the region.
The Goldilocks narrative may be optimistic, said Jon Mawby,
co-head of absolute and total return credit at Pictet Asset Management. He
noted that while hard headline data looked good, softer survey data such as a
rise in U.S. credit delinquencies were pointing the other way.
"I think there's a not insignificant probability that
the softer data is telling the real (economic) story," he said.
Investors in government bonds, where shifting rate cut
signals have caused volatility in recent weeks, were less decisive than stock
traders about the future path of monetary policy.
The 10-year Treasury yield , which moves inversely to the
price of the debt and functions as a benchmark for debt costs worldwide, inched
2 basis points (bps) higher to 4.27% after falling in the two previous
sessions.
Germany's 10-year Bund yield rose 6 bps to 2.46% after
falling by around the same amount on Thursday.
An index measuring the dollar against competing currencies
was steady. The yen < JPY=EBS > stumbled back to almost 151 per dollar
after contrasting comments from Bank of Japan officials kept investors guessing
about when it might end its negative interest rates policy.
Oil prices were steady. Brent was stuck at $81.96 a barrel,
while U.S. crude was flat at $78.23.
The spot gold price was 0.2% lower at $2,040.19.
- Reuters
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