Hope for smaller rate rises to lift Wall Street, oil gains

By Huw Jones and Sujata Rao

LONDON, Aug 11 (Reuters) - Wall Street headed for another day of gains on Thursday as investors banked on peaking inflation persuading central banks to dial back on their anticipated interest rate hikes in September.

The prospect of less aggressive tightening in borrowing costs sent the dollar lower, while oil prices rallied after the International Energy Agency raised its oil demand growth forecast for this year.

Figures on Wednesday showed that U.S. consumer prices (CPI)were unchanged in July compared with June, a two-year rise in inflation stopped in its tracks by a drop in gasoline prices.

The S&P 500 futures ESc1 and Nasdaq futures NQc1 were up about 0.35%.

Before Wall Street's opening bell, however, investors will scrutinise U.S. producer prices data for further clues on inflation, along with the latest jobless claims numbers.

"For the first time in long time we had a bit of good news so markets may extend this rally," said Grace Peters, EMEA head of investment strategy at JPMorgan Private Bank.

"We agree with the direction of travel, but if you dig into the CPI data you can see in the details that inflation is broad and pretty sticky and will come down only slowly from here," she said.

This means the Fed may step down the pace of rate hikes from 75 basis points to 50 basis points, Peters said.

In Europe, the STOXX index .STOXX of 600 leading companies was up flat. The MSCI all country index .MIWD00000PUS slightly firmer, though it remains down about 14% for the year, wiping out most of 2021's 17% advance.

The World Federation of Exchanges said $18 trillion has been wiped off global markets in the first half of 2022, a 15% drop in stock market capitalisation, as the global economy tries to recover from COVID-19 and deal with fallout from war in Ukraine.

The dollar =USD lost further ground against other major currencies EUR= JPY=EBS , down 0.238% as traders reined in bets of aggressive rate hikes.

"We think a Fed doing battle with higher core inflation will keep the dollar supported on dips - especially against the euro and yen," ING said in a note.


Overnight on Wall Street, the S&P 500 .SPX rose more than 2%, while the Nasdaq Composite .IXIC added 2.9%. The Nasdaq has now gained more than 20% from its June low.

"Rising real yields, due to the Fed's commitment to fighting inflation, have been an enormous problem for valuations in 2022, so any dovishness is seen as positive by the stock market, particularly for the highest valued companies," said Oliver Blackbourn, multi-asset portfolio manager at Janus Henderson Investors.

"However, the potentially more dovish outlook undermined a key support for the U.S. dollar."

U.S. policymakers left no doubt they would continue to tighten monetary policy until price pressures were fully broken.

San Francisco Fed President Mary Daly, in an interview with the Financial Times, warned it is far too early for the U.S. central bank to declare victory in its fight against inflation and a half-percentage point rate rise in September was her baseline.

Yields on U.S. Treasuries US10YT=RR were slightly weaker at 2.7698%.

Brent crude LCOc1 futures gained 0.8% to $98.19 a barrel, while U.S. West Texas Intermediate crude CLc1 futures advanced 0.9% to $92.70.

Spot gold XAU= was flat at $1,792 per ounce.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS surged 1.4% to the highest in six weeks, buoyed by a 1.8% jump in Hong Kong .HSI , a 1.2% advance in South Korean shares .KS11 and a 1.5% gain in China's blue chips .CSI300 .

World FX rates YTD Link
Global asset performance Link
Fed funds futures Link
Dollar Link

Additional reporting by Stella Qiu and Alun John; Editing by
Alexander Smith, Elaine Hardcastle

Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.

Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.

Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.

Gumagamit kami ng cookies para mabigyan ka ng mahusay na karanasan sa aming website. Magbasa pa o palitan ang iyong cookie settings.

Babala sa Risk: Maaaring malugi ang iyong kapital. Maaaring hindi nababagay sa lahat ang mga produktong naka-leverage. Mangyaring isaalang-alang ang aming Pahayag sa Risk.