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Oil poised to end the week flat
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Dollar poised for biggest weekly gains since Feb
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Nikkei rises 0.9% to highest in 1-1/2 years
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U.S. stock index futures up ahead of Wall Street open
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U.S. data adds to confidence of Fed pausing, flags
slowdown risk
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Banking fears linger after fall in PacWest deposits
By Huw Jones
LONDON, May 12 (Reuters) - Global stock markets clung to
modest gains on Friday, reassured by the prospect of a steady
start on Wall Street, though worries over U.S. government
finances capped investor appetite for risk.
Oil prices shook off earlier losses as signs of a supply
deficit countered worries over fuel demand in the United States
and China.
The dollar edged higher, heading for its biggest
weekly gain since February as investors bet that overnight data
showing a slowing U.S. economy would prompt the U.S. Federal
Reserve to pause on rate hikes.
The MSCI All Country stock index was flat
and little changed for the week, but still up about 7% for the
year.
Nasdaq futures and S&P 500 futures were
firmer, with Tesla Inc up 1.5% in pre-market trading as
the electric vehicle maker raised the U.S. prices of some models
and boss Elon Musk said he has found a new chief executive for
Twitter.
In Europe, the STOXX index of 600 companies edged
up 0.4%, putting it slightly firmer for the week as Richemont shares hit a record high on news of strong demand in the
Asia Pacific region.
Britain's economy grew in the first three months of the year
- instead of recession that was being forecast in late 2022 -
but recovery remains fragile.
Analysts said investors are searching for fresh reasons to
push markets out of their ranges as a generally positive
earnings season draws to a close and the next batch of major
central bank rate-setting meetings are a few weeks away.
"We have had an aggressively sideways moving market and
people are looking for something to give it direction," said
Mark Tinker, chief investment officer at Toscafund asset
management in Hong Kong.
A meeting between U.S. President Joe Biden and top lawmakers
that had been scheduled for Friday has been postponed to early
next week, with the IMF warning that a U.S. default would have
"serious repercussions" for the U.S. economy.
"We have a lot of things to trip over in the next six months and that is why people are not committing to buying," Tinker said, pointing to the U.S. debt ceiling stalemate, ending the use of Libor interest rates in June, and how the war in Ukraine unfolds. U.S. data on Thursday added confidence that the Federal Reserve is almost certain to pause its rate hikes at its policy meeting in June, with futures markets continuing to price in cuts of about 78 basis points by the end of the year. Next week, investors will be scrutinising a batch of U.S. data for rate clues, with retail sales and industrial production figures. "The former should get a lift from robust auto sales, while the latter will be held back by falling production," ING bank said.
CHINA LOSING STEAM China's economic recovery seems to be losing steam, with new bank loans tumbling in April, consumer prices rising at the slowest pace in more than two years and imports unexpectedly contracting, driving a plunge in commodity prices from copper and iron ore to oil. China's blue-chips fell 1.3% and looked poised to lose 1.7% for the week, while Hong Kong stocks were down 0.5% on the day. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6% and was headed for a weekly decline of 1.2%. Japanese shares outperformed, however, with the Nikkei climbing 0.9% to its highest level since November 2021, as investors cheered announcements of increased shareholder returns during earnings season. The U.S. dollar benefited from safe-haven flows amid growth concerns and banking worries, holding on to slim gains against a basket of currencies. The euro was trading at $1.089, down 0.2% on the day, and sterling was slightly firmer at $1.2527. Treasury yields firmed, with benchmark 10-year notes at 3.4177%, while two-year yields were at 3.9140%. U.S. crude futures edged up 0.4% to $71.17 per barrel, while Brent crude gained 0.3% to $75.24 per barrel. Gold prices were 0.6% lower at $2,004 per ounce. Bitcoin was down 2.3% at $26,362. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets Asia-Pacific valuations UK's growth still lagging behind G7 Weekly flows into global bond funds ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Huw Jones Additional reporting by Stella Qiu Editing by Edwina Gibbs, Mark Potter and Chizu Nomiyama)
