China reported a stronger than expected rise in consumer prices
Wall Street stocks finished higher overnight as Treasury yields continued to retreat from highs after Federal Reserve Chair Jerome Powell reiterated that inflation was not a worry. On the negative side, the number of Americans who filed for unemployment benefits last week rose again last week. The S&P 500 index gained 0.42% the Dow Jones Industrial Average gained 0.17%, and the tech-heavy Nasdaq Composite climbed 1.03%.
In Asia, equities were mixed-to-lower on Friday amid worries about a potential tightening in monetary policy after China reported a stronger than expected rise in prices. The consumer price index rose 0.4% in March compared with -0.2% in February, while prices paid by manufacturers rose 4.4% from a year earlier. As such, the Shanghai Composite index lost 0.92% and the Hang Seng in Hong Kong fell 1.07%. Australia’s S&P/ASX 200 gave up 0.05% while Japan’s Nikkei 225 bucked the trend, rising 0.20%.
European stocks held steady near record levels on Friday as investors digested the latest comments from Federal Reserve Chairman Jerome Powell. The Stoxx Europe 600 slipped 0.04% in early trading while the French CAC edged 0.14% higher. On the negative side, German and French industrial production both saw surprise drops in February.
Meanwhile, the USD index is consolidating marginally above the 92.00 mark, erasing yesterday’s losses. EURUSD is correcting lower from the 1.1930 area, flirting with the 100-DMA during the early hours in Europe. However, the pair could resume the ascent later today if the selling pressure surrounding the dollar reemerges. If so, the common currency will finish the trading week above the 1.1900 figure.
In other markets, gold prices failed to challenge the $1,760 region on Thursday and turned negative today amid dollar recovery. However, the downside pressure looks limited, with the precious metal holding above the 20-DMA that represents the key short-term support around $1,730.