* World shares dip slightly; Nikkei hits a fresh record
* Markets await inflation data from US, euro area and Japan
Feb 26 (Reuters) – MSCI’s global equity index was down
slightly on Monday after hitting record highs the week before as
investors took a breath while they waited for the next batch of
U.S. economic data.
U.S. Treasury yields rose slightly while the dollar fell
slightly against a basket of currencies including the euro
although it gained ground slightly against the yen.
The U.S. Federal Reserve’s favoured measure of inflation –
the core personal consumption expenditures (PCE) price index –
is due on Thursday with a Reuters poll expecting a rise of 0.4%,
up from 0.2% in December.
“The PCE price inflation index (is) expected to show a
little bit more inflation, in line with the numbers that we saw
with the CPI and PPI, so the markets are bracing for that,” said
Peter Cardillo, chief market economist at Spartan Capital
Securities referring to readings of the consumer price index and
the producer price index.
The data will provide the next test for investors, who have
had to rethink their bets on central bank rate cuts in recent
weeks, surprised by strong U.S. job growth and inflation.
Investors were also watching the risk that U.S. government
agencies could be shut down if Congress cannot agree on a
borrowing extension by Friday.
On Monday at 10:53 a.m., the Dow Jones Industrial Average
rose 22.14 points, or 0.06%, to 39,153.67, the S&P 500
lost 2.41 points, or 0.05%, to 5,086.39 and the Nasdaq
Composite gained 29.02 points, or 0.18%, to 16,025.58.
MSCI’s gauge of stocks across the globe fell
0.39 points, or 0.05%, to 760.79. It had risen to record highs
last week driven by a rally in U.S. stocks helped by a bullish
financial update from AI pioneer Nvidia.
DEBT AUCTION
Commodity linked stocks put pressure on European indexes,
with the STOXX 600 index falling 0.34%, while Europe’s
broad FTSEurofirst 300 index fell 0.31%. The STOXX 600
hit record highs last week as comments from ECB policymakers had
prompted optimism over rate cuts on Friday.
Emerging market stocks fell 4.48 points, or 0.44%,
to 1,023.83.
Japan’s blue-chip Nikkei scaled record highs for the second
consecutive trading session, supported by upbeat performances in
pharmaceuticals, although profit-taking limited momentum. The
Nikkei closed up 135.03 points, or 0.35%, to 39,233.71.
But MSCI’s broadest index of Asia-Pacific shares outside
Japan closed 0.43% lower 0.43%, at 526.50.
U.S. Treasuries yields edged slightly higher on Monday in
anticipation of the scheduled auction of $149 billion of
government debt as investors demanded higher yields to take on
such a large supply.
The yield on benchmark U.S. 10-year notes rose
1.6 basis points to 4.276%, from 4.26% late on Friday. The
30-year bond yield rose 1.1 basis points to 4.3913%
from 4.38% late on Friday. The 2-year note yield,
which typically moves in step with interest rate expectations,
rose 2.4 basis points to 4.7139%, from 4.69% late on Friday.
In currencies, the dollar index edged down ahead of U.S.
durable goods orders and the inflation reading.
The dollar index fell 0.18% at 103.78, with the euro
up 0.31% at 1.0851.
Against the Japanese yen, the dollar strengthened
0.12% at 150.68 ahead of Japanese inflation data due on Tuesday,
forecast to slow to 1.8%. That could add to the case against
policy tightening by the Bank of Japan, the holdout dove among
developed market central banks.
In commodities, oil prices turned higher after earlier
slipping amid speculation stronger than expected inflation could
delay cuts to high interest rates and cap global fuel demand.
U.S. crude gained 0.75% to $77.06 a barrel and Brent
rose to $82.07 per barrel on the day.
Spot gold lost 0.35% to $2,028.79 an ounce. U.S. gold
futures fell 0.68% to $2,024.80 an ounce.
(Reporting by Sinéad Carew, Yoruk Bahceli and Wayne Cole;
Editing by Susan Fenton, Ed Osmond and Alison Williams)
