"Most of these numbers either came in on target or slightly better. The markets are looking at the combined reports as a net positive overall," said Randy Frederick, managing director of trading and derivatives at Charles Schwab. The inflation data came on the heels of last Friday's employment report, which showed a solid pace of job growth in March and the unemployment rate falling back to 3.5%.
In Europe, stock markets rose after the U.S. data and the broad STOXX 600 index was last up 0.5% and holding near one-month highs. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan was 0.2% lower in choppy trading, snapping a three-day winning streak.
BONDS UP, DOLLAR DOWN
U.S. bonds yields fell after the CPI numbers. Rate-sensitive two-year Treasury yields were last down 12 basis points at 3.93% , while U.S. 10-year yields fell 6 bps to 3.37%.
The dollar fell with an index measuring the U.S. currency against six rivals down 0.4% at 101.72.
The euro was up 0.5% at $1.0965, while sterling was at $1.24525, up 0.2% on the day.
The dollar was also down 0.5% to 133.04 yen.
Overnight, Philadelphia Federal Reserve Bank President Patrick Harker said he feels the U.S. central bank may soon be done raising interest rates, but reiterated the desire to bring inflation back to its 2% target. The Fed last month raised interest rates by a quarter of a percentage point, taking it to a range of 4.75% to 5.00%. Minutes of the Fed's March meeting are also due to be released later in the day and investors will parse it for clues on the monetary path of the central bank, as well as the impact of the stress in the banking sector. The International Monetary Fund warned on Tuesday that lurking financial system vulnerabilities could erupt into a new crisis and slam global growth this year as it lowered its 2023 global growth forecasts. While markets expect rates moving lower, the cut in oil production announced by the OPEC+ group last week has also fanned fears of inflation flaring up, and for investors to really lower their concerns over inflation there will have to be a clear fall in prices for services, Saxo Markets strategists said. "We don't think we are there yet. With oil prices rising again and labour market cooling only gradually, risk remains tilted for core inflation to remain elevated for longer," they said. Geopolitics was also in focus after China said on Wednesday that President Tsai Ing-wen was pushing Taiwan into "stormy seas" after Beijing held military exercises in response to Tsai's recent meeting with U.S. House Speaker Kevin McCarthy in California. China shares were mixed, with the Shanghai Composite Index up 0.4% while Hong Kong's Hang Seng Index slipped 0.9% as investors weighed rising geopolitical tensions.
Elsewhere, Brent crude was at $86.19, up 0.7%, while spot gold was up 1% to $2,022 an ounce. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD Global asset performance Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Ankur Banerjee and Yoruk Bahceli; Additional reporting by Dhara Ranasinghe; Editing by Christopher Cushing, Simon Cameron-Moore, Toby Chopra and Raissa Kasolowsky)
Twitter: @AnkurBanerjee17;))