NEW YORK/ LONDON Dec 13 (Reuters) - MSCI's global equity index was lower on Friday while the dollar index barely changed after five days of gains as investors waited for clues about the future path for interest rates from next week's U.S. Federal Reserve meeting.
In U.S. Treasuries, benchmark 10-year U.S. Treasury yields rose to a two-and-a-half week high and were on track for their fifth straight gain. Investors are betting Federal Reserve chair Jerome Powell will signal a pause in policy easing after an expected 25-basis-point rate cut next Wednesday.
The Fed is grappling with inflation staying stubbornly above its 2% annual target. Data released on Thursday showed higher-than-expected U.S. producer prices in November.
Friday's data showed U.S. import prices barely rose in November as increases in food and fuel costs were partially offset by decreases elsewhere, thanks to a strong dollar.
"The market is assuming that Powell cuts next week and then pauses. I think that's the right assumption because we're seeing a tension between the inflationary data and the labor-market data," said Matt Rowe, head of portfolio management and cross-asset strategies at Nomura Capital Management.
While surging chipmaker Broadcom (AVGO.O), opens new tab was a big boost for the Nasdaq, Wall Street lost ground after early gains. European stocks broke a three-week winning streak, as investors sought clarity on the euro zone's pace of policy easing for 2025 amid concerns about economic growth and a potential trade war.
At 11:26 a.m. EST (1626 GMT) the Dow Jones Industrial Average (.DJI), opens new tab fell 3.07 points, or 0.01%, to 43,908.44, the S&P 500 (.SPX), opens new tab fell 8.97 points, or 0.15%, to 6,042.32 and the Nasdaq Composite (.IXIC), opens new tab fell 59.91 points, or 0.30%, to 19,842.92.
MSCI's gauge of stocks across the globe (.MIWD00000PUS), opens new tab fell 3.25 points, or 0.37%, to 865.23 while Europe's STOXX 600 (.STOXX), opens new tab index fell 0.62%.
In fixed income, the yield on benchmark U.S. 10-year notes rose 5.1 basis points to 4.375%, from 4.324% late on Thursday while the 30-year bond yield rose 4.6 basis points to 4.5935%.
The 2-year note yield, which typically moves in step with Fed interest-rate expectations, rose 4 basis points to 4.226%, from 4.186% late on Thursday.
In currencies, the dollar was headed for its biggest weekly gain in a month on the prospect of slower U.S. rate cuts next year.
Sterling fell after a surprise contraction in UK economic activity while the euro clawed back some recent losses in the wake of the European Central Bank's rate cut on Thursday.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro,
rose 0.03% to 106.99. The euro was up 0.27% at $1.0495.
Against the Japanese yen , the dollar strengthened 0.67% to 153.64 on the day, having risen all week as traders scaled back bets on a rate hike from the Bank of Japan next week. Sources said the BOJ is leaning towards keeping rates steady.
In energy markets, oil prices rose and were heading for their first weekly rise since the end of November, as additional sanctions on Russia ratcheted up supply worries, while a surplus outlook weighed on markets.
U.S. crude rose 1.1% to $70.80 a barrel and Brent rose to $74.03 per barrel, up 0.83% on the day.
In precious metals, gold fell after bullion hit a more than five-week high in the previous session, while prices tracked for a weekly rise on bets for a Fed rate cut next week.
Spot gold fell 0.82% to $2,659.45 an ounce. U.S. gold futures fell 0.96% to $2,661.70 an ounce.
Earlier both China's blue-chip stocks (.CSI300), opens new tab and Hong Kong's Hang Seng (.HSI), opens new tab lost more than 2% after the Central Economic Work Conference did not offer details on new stimulus measures.
Reporting by Sinéad Carew in New York, Harry Robertson in London, Stella Qiu in Sydney; Editing by Edwina Gibbs, Sam Holmes, Gareth Jones, William Maclean
