STOCK markets mostly rose yesterday on the eve of the release of key US inflation data that will show whether consumer prices have cooled from decades-high levels.

Inflation figures today are set to fuel speculation about whether the US Federal Reserve will further lift interest rates, after data last week showed a healthy rise in hiring.

The central bank has steeply hiked rates in efforts to battle inflation but investors fear the monetary tightening could tip the world’s largest economy into recession.

Yesterday the International Monetary Fund slightly lowered its global growth forecast to 2.8% but raised the outlook for the United States to 1.6%, up 0.2 percentage point.

A stronger economy can give the Fed more room to raise rates.

Wall Street had a mixed showing, with the Dow rising 0.3% but the broad-based S&P 500 closing flat. The tech-rich Nasdaq slipped 0.4%.

“Today’s headlines didn’t tell Wall Street anything it didn’t already know,” said Edward Moya of the Oanda trading platform, echoing analyst sentiment that lower global growth was likely already priced-in by markets.

European markets closed higher, with the Paris CAC 40 reaching a record 7,403.67 points before paring down some gains, in a sign that investors are in a buying mood again following last month’s scare over the global banking sector.

Asian indices finished mostly higher.

“We are definitely in a bit of a wait-and-see period for the markets,” said Steve Sosnick of Interactive Brokers, pointing to an upcoming series of US economic reports.

With the consumer price index to be released today, producer price index due tomorrow and bank earnings on Friday, he added: “There is going to be a lot for the markets to digest.”

Several analysts expect the Fed to raise its benchmark lending rate by 0.25%age point at its May meeting.

“The ongoing discussion of when the Federal Reserve will cut rates remains somewhat premature,” said Clifford Bennett, chief economist at ACY Securities.

“The only real question remains just how high the Fed will go?”

Investors are also preparing for the start of first-quarter earnings season, with banking titans JPMorgan and Citigroup among those reporting on Friday.

The corporate results will be closely watched following the recent banking crisis that shook confidence in the financial sector.

In Asia, data out of China showed consumer prices rose less than expected in March and factory costs dropped, suggesting that there remains some weakness in the world’s second-largest economy even as it reopens after the lifting of Covid restrictions.

It does, however, provide the People’s Bank of China with room to unveil further growth-boosting measures.

“Economic recovery is on track but not strong enough to push up prices,” said Zhang Zhiwei at Pinpoint Asset Management.

“This suggests the economy is still running below its potential. There is room for fiscal and monetary policies to boost growth further,” he said.

Elsewhere, bitcoin traded above US$30,000 for the first time in 10 months following a recent run higher.

Key figures around 2015 GMT

New York - Dow: UP 0.3% at 33,684.79 (close)

New York - S&P 500: FLAT at 4,108.94 (close)

New York - Nasdaq: DOWN 0.4% at 12,031.87 (close)

London - FTSE 100: UP 0.6% at 7,785.72 (close)

Paris - CAC 40: UP 0.9% at 7,390.28 (close)

Frankfurt - DAX: UP 0.4% at 15,655.17 (close)

EURO STOXX 50: UP 0.6% at 4,333.29 (close)

Tokyo - Nikkei 225: UP 1.1% at 27,923.37 (close)

Hong Kong - Hang Seng Index: UP 0.8% at 20,485.24 (close)

Shanghai - Composite: DOWN 0.1% at 3,313.57 (close)

Euro/dollar: UP at US$1.0918 from US$1.0865 on Monday

Pound/dollar: UP at US$1.2428 from US$1.2384

Euro/pound: UP at 87.83 pence at 87.70 pence

Dollar/yen: UP at  ¥133.69 from  ¥133.59

West Texas Intermediate: UP 2.2% at US$81.53 per barrel

Brent North Sea crude: UP 1.7% at US$85.61 per barrel – AFP, April 12, 2023.