In Asian Equity Markets stocks edged higher but held their recent trading range on Thursday as investors focussed on U.S. inflation data and the risk of an upside surprise that could prompt the Federal Reserve to start tapering its massive stimulus. MSCI’s broadest index of Asia-Pacific shares outside Japan were marginally higher at 700.6 points, but stayed in the 698-712 points range it has traded in since late May. Japan’s Nikkei and Australia’s benchmark stocks rose 0.4 percent each. Chinese stocks gained with the blue-chip index up 0.9 percent.
In Currency Markets the dollar continued to hover near a five-month low versus major peers on Thursday as investors looked to key U.S. inflation data and a European Central Bank meeting later in the day to potentially set the direction for currency markets. The dollar index has fluctuated narrowly around the psychologically important 90 level, and was last at 90.137. The euro rose to a one-week high at $1.2218 on Wednesday only to finish little changed, and was essentially flat at $1.2178 in Asia. The yen traded at 109.62 per dollar. The Chinese yuan, ticked up slightly to 6.3869 per dollar.
In US Equity Markets stocks ended lower on Wednesday as market participants awaited inflation data for clues as to when the U.S. Fed might tighten its dovish monetary policy. The Dow fell 0.44 percent, to 34,447.14; the S&P 500 lost 0.18 percent, at 4,219.55; and the Nasdaq Composite fell 0.09 percent, to 13,911.75. Drugmaker Merck & Co rose 2.3 percent on the heels of its announcement the U.S. government had agreed to buy about 1.7 million courses of the company’s experimental COVID-19 treatment, molnupiravir, for about $1.2 billion, if the drug meets regulatory approval.
In Commodities Markets gold held in a tight range on Wednesday as investors looked forward to U.S. inflation data that could shape the course of the Federal Reserve’s monetary policy. Spot gold was down 0.1 percent at $1,891.05 per ounce. Among other precious metals, silver rose 0.8 percent to $27.86 per ounce, palladium eased 1.2 percent to $2,773.94, while platinum lost 1.2 percent to $1,148.07. Oil prices continued to rally on signs of strong fuel demand in Western economies. Brent crude futures settled unchanged at 72.22 a barrel, while U.S. crude futures fell 9 cents to $69.96 a barrel.
In European Equity Markets stocks remained near record highs on Wednesday, with investors holding off on taking big bets ahead of a policy decision from the ECB and a U.S. inflation reading later this week. The pan-European STOXX 600 index closed 0.1 percent higher. Britain’s FTSE fell 0.2 percent as UK-listed miners fell under pressure from lower base metal prices. Air France KLM, Lufthansa and British Airways owner IAG climbed about 3 percent each after the U.S. Centers for Disease Control and Prevention (CDC) said it was easing travel recommendations on 110 countries and territories.
In Bond Markets U.S. Treasury yields moved lower on Wednesday for a second day as traders positioned for inflation data due on Thursday and showed strong demand at an auction, pushing the benchmark 10-year yield below 1.5 percent for the first time since May 7. The yield on the 10-year note was down 3.4 basis points at 1.4941 percent in afternoon trading, after reaching as low as 1.472 percent earlier in the session. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down less than a basis point at 0.1548 percent.