Stocks Edge Higher on Light Volumes; Oil Retreats: Markets Wrap

(Bloomberg) -- Global equity markets edged higher on Thursday as investors took stock of recent gains and weighed the implications of soft U.S. inflation data.

S&P 500 futures rose and 10-year Treasury yields held below 1.15%. In Europe, the Stoxx 600 Index was buoyed by strong results from Royal Mail Plc and Credit Agricole SA. Trading volumes for the Euro Stoxx 50 were about 20% below the 30-day average.

After a sharp run-up in equities at the start of February, traders now seem to be taking a more subdued stance, especially after data on Wednesday showed the core consumer price index was unchanged last month. In the background, there’s still a debate over whether more U.S. stimulus, the vaccine rollout and the government’s determination to kickstart growth will cause the American economy to overheat.

“While inflation is not showing up in the data right now, inflation is on its way thanks to fiscal and monetary stimulus and pent-up consumer demand that should intensify as the economy reopens,” Nancy Davis, founder of Quadratic Capital Management, said in a note.

In a speech Wednesday, Federal Reserve Chair Jerome Powell said the U.S. job market remains a long way from a full recovery and called on both lawmakers and the private sector to support workers. He also said it will require more than supportive monetary policy to achieve and sustain maximum employment.

Elsewhere in markets, oil edged lower after capping the longest run of gains in two years. The dollar was steady and Bitcoin traded around $45,000.

Here are some key events coming up:

• Lunar New Year public holidays begin in nations across Asia, with China breaking for a week.
• Bank of Russia’s policy decision comes Friday.

These are the main moves in markets:

Stocks

• Futures on the S&P 500 Index increased 0.1% as of 8:51 a.m. London time.
• The Stoxx Europe 600 Index climbed 0.3%.
• The MSCI Asia Pacific Index gained 0.1%.
• The MSCI Emerging Market Index advanced 0.2%.

Currencies

• The Bloomberg Dollar Spot Index declined 0.1% to 1,123.60.
• The euro was little changed at $1.2124.
• The British pound fell 0.1% to $1.3822.
• The Japanese yen weakened 0.1% to 104.69 per dollar.

Bonds

• The yield on 10-year Treasuries gained two basis points to 1.14%.
• The yield on two-year Treasuries was unchanged at 0.11%.
• Germany’s 10-year yield sank three basis points to -0.47%.
• Britain’s 10-year yield sank three basis points to 0.458%.

Commodities

• West Texas Intermediate crude declined 0.1%.
• Gold was little changed at $1,842.05 an ounce.

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