London, United Kingdom – World stock markets mostly rose Wednesday as investors jockeyed for position before key US inflation data.
London equities climbed after the Bank of England announced that all major UK retail lenders passed stress tests to assess their resilience to economic shocks.
Frankfurt and Paris also advanced before the week’s main event, the US consumer price index, which forecasts suggest will show a further softening.
That will be followed by US producer prices on Thursday, paving the way for the Federal Reserve’s next policy meeting in two weeks.
Topping agenda
“US inflation figures are at the top of the agenda for investors,” said Danni Hewson, head of financial analysis at stockbroker AJ Bell.
“Equity and bond markets are heavily tuned into inflation data as it is crucial to central bank decisions on interest rates.”
Fed policymakers are expected to hike rates this month but there is hope that the slowdown in inflation and figures pointing to a softening in the economy could mean that is the last.
The dollar has weakened against its peers in recent weeks on bets the Fed is nearing its endgame, with sterling among the best performers as sticky UK inflation means the Bank of England has to keep lifting.
The pound held above $1.29 on Wednesday, one day after breaching the barrier for the first time in 15 months.
The euro was trading at its highest dollar level since the start of May.
Asian equities have meanwhile enjoyed a broadly positive week so far after China signaled a long-running crackdown on the tech sector was nearing an end while officials also pledged help for ailing real estate developers.
That was followed by reports that further growth-boosting measures and data showing new loans in China had picked up in June thanks to a central bank interest rate cut.
Optimism is now building for more announcements aimed at kickstarting the world’s number two economy as its post-Covid recovery sputters.
Hong Kong was again the stand-out performer thanks to gains in tech stocks, while Sydney, Singapore, Seoul, Taipei, Manila, Bangkok and Jakarta were also up.