Shares climb to 3-week high as rates debate hots up
investing.comBy Marc Jones
LONDON (Reuters) — World shares rose and the dollar and bond market borrowing costs held steady on Thursday ahead of U.S. inflation data and European Central Bank meeting minutes that will add to the hotly-contested debate on where interest rates are heading.
The week's sharp escalation of Middle East tensions ensured the mood remained cautious but European stocks shuffled to a 3-week high early on (EU) after a 1.75% jump from Tokyo had done the same for Asia.
Wall Street futures were 0.3% higher too, while the dollar was hovering near a two-week low after Fed meeting minutes on Wednesday had showed a caution about the economy starting to set in among rate setters.
News that Central Huijin Investment, a Chinese state fund, raised stakes in the country's big four banks had also boosted confidence in the broader Asian market as Hong Kong's heavyweight Hang Seng index jumped 2.0%.
China, however, has also issued a notice prohibiting domestic brokerages and their overseas units from taking on new mainland clients for offshore trading, which will restrict capital outflows, Reuters reported on Thursday.
The recent buoyancy in markets also owes much to comments from Fed officials suggesting U.S. interest rates — which tend to drive global borrowing costs — may have finally peaked.
U.S. Fed Governor Christopher Waller on Wednesday said higher market interest rates may help the Fed slow inflation and allow the central bank to «watch and see» if its own policy rate needed to rise again or not.
Waller has been among the most vocal advocates for higher interest rates to fight inflation, and his view added weight to similar statements this week by Fed Vice Chair Philip Jefferson and Dallas Fed President Lorie Logan.
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