Boosted by a $1 trillion U.S. infrastructure bill, global stock markets held the line close to their all-time highs on Tuesday but investors were reluctant to commit further to the rally before getting a clearer picture of the surge in U.S inflation.
U.S. Treasury yields slipped after the uplift triggered by the weekend passage of the long-delayed infrastructure stimulus faded and the dollar was held below recent highs.
The pan-European STOXX opened flat but just a whisker from the record high hit last week while MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.26%.
U.S. stock futures were broadly unchanged after Wall Street’s benchmark S&P 500 index SPX and the Nasdaq IXIC extended their run of all-time closing highs to eight straight sessions.
European equity strategy
“Markets have risen fast and strong, there’s been a vigorous rebound but the catalyst provided by the third-quarter earnings season is coming to an end,” said Emmanuel Cau, head of European equity strategy at Barclays.
He argued it was rather “healthy” to see markets pause to digest the good news provided by upbeat corporate earnings and by major central bankers in no rush to raise interest rates.
Cau noted that market positioning was far from extreme and that many investors remained prudent going forward even there is no obvious imminent threat to the rally.
Market analysts are, however, eager to get their hands on U.S. consumer prices data on Wednesday as a stronger than expected reading would rekindle talk of the Federal Reserve raising interest rates earlier than expected.
The yield on benchmark 10-year Treasury notes US10YT=RR ticked down to 1.4793% while the euro zone benchmark, the German 10-year bund, edged down slightly to -0.254%.
The dollar index DXY, which tracks the greenback against a basket of six currencies, was down 0.06% at 94.00 while Japan’s yen hit a one-month high against the greenback.
Commodities & Crypto
Elsewhere in crypto currencies, bitcoin BTCUSD hit a new record and held close to it at about $68,000.
Oil prices were slightly up as the passage of the U.S. infrastructure bill and China’s export growth supported the outlook for energy demand.
Saudi Arabia’s state-owned producer Aramco also raised the official selling price for its crude.
U.S. crude ticked up 0.59% to $82.4 a barrel. Brent crude rose 0.46% to $83.31 per barrel.
Spot gold XAU= was slightly down at $1,823.800 per ounce