October 15, 2015 / 12:29 AM / 2 years ago

GLOBAL MARKETS-Data hauls dollar off 2-month low, stocks push higher

* Europe tracks Asian stock gains as Fed hike bets wither
    * MSCI Asia-Pacific index hits 2-month high
    * Dollar struggles at multi-week lows versus peers
    * U.S. crude dips amid lingering global glut concerns

    By Marc Jones
    LONDON, Oct 15 (Reuters) - Reassuring U.S. core inflation
and jobless claims figures lifted the dollar off a two-month low
on Thursday, while a two-month high for Asian indexes saw world
shares bounce back from two days of losses.
    A steady pick-up in underlying U.S. consumer price pressures
and the lowest new unemployment claims in 42 years helped allay
fears of a new bout of disinflation and settled some nerves
after Goldman Sachs became to latest major Wall Street
name to report a plunge in profits. 
    Dire data and company results on Wednesday that included $22
billion being wiped off the value of the world's largest
retailer Wal-Mart, had seen the dollar drop overnight. 
    But the CPI numbers cemented a turnaround and it was pulling
clear of the $1.15 per euro and the 118.10 yen 
levels it had tested as Wall Street's main markets also got off
to a 0.3 - 0.6 percent positive start.     
    "The dollar having been on the back foot, is now less on the
back foot" said Kit Juckes, at Societe Generale in London 
    "But the markets are extremely fickle. Between the comments
from Nowotny and a small tick up in U.S. underlying CPI we have
managed to shift (the dollar direction) around. But there is
only so much happiness I can get from data is still soft."
    The dollar's slide was initially halted by European Central
Bank policymaker Ewald Nowotny who said it was "quite obvious
that additional sets of instruments are necessary" if the ECB
wants to get euro zone inflation heading back towards 2 percent.
  
    The scent of stimulus helped European shares snap a
three-day slide. The pan-European FTSEurofirst 300 rose
1.2 percent after Asian bourses, which are also eyeing stimulus
from China and Japan, had hit their highest since mid-August.
    A new Reuters poll showed China is expected to keep cutting
interest rates and bank reserve requirements against a backdrop
of slowing growth which is now expected to be 6.5 percent next
year. 
    MSCI's broadest index of Asia-Pacific shares outside Japan
 ended up 2 percent as Shanghai shares 
advanced 2.3 percent, Australian shares nudged up 0.6
percent and South Korea's Kospi climbed 1.1 percent.
    Japan's Nikkei gained 1.15 percent, as the second
successive fall in manufacturers' sentiment kept pressure on its
policymakers to do more. 
    "There seem to be considerable expectations of further
economic stimulus, which could mitigate some of the deflationary
pressures," said Gerry Alfonso, analyst at Shenwan Hongyuan
Securities.
    
    EMERGING RELIEF
    The U.S. data saw a minor unwinding of Wednesday's debt
market rally. U.S. 10-year notes saw their yields climb back to
2 percent and Germany Bund yields nudged higher too though the
strength of the move was questionable. 
    The chance of a Fed rate hike any time soon have all but
evaporated following a month-long run of disappointing U.S. and
also Chinese and European data.
    European Central Bank Vice President Vitor Constancio said a
rate hike by the Fed could have greater global repercussions
than in the past because the economy has changed and central
banks were "learning in real time" having got little experience
of moving away from zero interest rates. 
    Among commodities, oil struggled amid lingering concerns of
a global supply glut and as the dollar stabilised.
Industrial metals got a fresh lift with copper near a
4-week high and gold reaching a 3-1/2 month peak. 
    Emerging Asian currencies also made the most of the earlier
dollar weakness. The Indonesian rupiah hit its strongest
in more than four months, South Korea's won touched a
three-month peak and Malaysia's ringgit jumped more
than 1 percent.
    "We are seeing continuous unwinding of bearish bets on
emerging currencies generally, as views of 'no U.S. hike this
year' are growing," said Seungji Jeon, Samsung Futures' FX
analyst in Seoul.

    
 (Editing by Janet Lawrence)

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