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Global stock index edges up while US dollar falls against the yen

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Global stock index edges up while U.S. dollar falls against the yen By Reuters

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Published Feb 27, 2024 02:27
Updated Feb 27, 2024 16:58

© Reuters. FILE PHOTO: A pedestrian is reflected on a glass of a business building while an electric board showing Nikkei index is seen in the building at a business district in Tokyo, Japan January 23, 2024. REUTERS/Kim Kyung-Hoon/File Photo

By Sinéad Carew and Elizabeth Howcroft

NEW YORK/LONDON (Reuters) -A global equities index gained very slightly on Tuesday while the dollar index was flat as investors weighed the outlook for central bank rate cuts after the latest batch of economic data and ahead of key U.S. inflation data due out later in the week.

The Conference Board said U.S. consumer confidence retreated in February after three straight monthly increases as households worried about the labor market and the domestic political environment. Its consumer confidence index slipped to 106.7 this month versus economist expectations of 115.0 and a downwardly revised 110.9 for January.

Also on Tuesday, orders for long-lasting U.S. manufactured goods fell by the most in nearly four years in January amid a sharp drop in bookings for commercial aircraft, while the outlook for business investment on equipment was mixed.

The next key data investors are looking out for will be Thursday’s release of January’s U.S. personal consumption expenditures index (PCE), which is the Federal Reserve’s preferred inflation measure.

Currently, 63% of traders expect the Fed to start cutting rates by June, down from nearly 98% at the end of January, according to the CME Group’s (NASDAQ:CME) FedWatch tool.

“We’re waiting for the PCE data to give us a stronger sense of direction perhaps,” said Shaun Osborne, chief currency strategist at Scotiabank in Toronto.

“I think we’re prepped for slightly stronger numbers; it probably at this point would have to be a big upside surprise to really get the dollar strengthening.”

The dollar was down slightly against the Japanese yen after data showing Japan’s core consumer inflation exceeded forecasts and that U.S. durable goods orders fell more than expected in January.

Against the Japanese yen, the dollar weakened 0.19% at 150.4. The dollar index, however, gained 0.02% at 103.79, with the euro down 0.03% at 1.0844.

Meanwhile in equities, MSCI’s gauge of stocks across the globe rose 0.90 points, or 0.12%.

By 11:02 a.m., the Dow Jones Industrial Average fell 130.43 points, or 0.33%, to 38,939.90, the S&P 500 gained 0.17 points, or 0.00%, to 5,069.70 and the Nasdaq Composite gained 32.35 points, or 0.20%, to 16,008.60.

The indexes have advanced recently on expectations major central banks will cut interest rates soon and partly due to investor enthusiasm around artificial intelligence.

In U.S. treasuries, he yield on benchmark U.S. 10-year notes fell 1.2 basis points to 4.287%, from 4.299% late on Monday. The 30-year bond yield fell 0.7 basis points to 4.4115% from 4.418%. The 2-year note yield, which typically moves in step with interest rate expectations, fell 2.5 basis points to 4.6912%, from 4.716%.

Oil prices rose on Tuesday as the market focused on uncertainty over a potential Gaza ceasefire and some expectations that producer group OPEC+ will extend voluntary supply cuts in March.

U.S. crude gained 0.97% to $78.33 a barrel and Brent rose 0.76% to $83.16 per barrel.

Gold prices rose while investors awaited for Thursday’s inflation reading and comments from Fed officials this week.

Spot gold added 0.14% to $2,033.52 an ounce. U.S. gold futures gained 0.36% to $2,035.90 an ounce.

Global stock index edges up while U.S. dollar falls against the yen

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