* Weak dollar lifts oil, metals; commodity stocks rise
* UK inflation jumps, sterling up on Brexit deal vote hint
* U.S. inflation due, dollar down as investors mull Fed
By Nigel Stephenson
LONDON, Oct 18 Rising commodity prices pulled
shares higher and the dollar slipped from a seven-month peak on
Tuesday, while sterling jumped on suggestions the UK parliament
would have to ratify any deal for Britain to leave the European
Wall Street looked set to follow European and Asian stocks
markets higher, according to index futures .
U.S. inflation data due later will also be a focus after
Federal Reserve Chair Janet Yellen suggested last week the
central bank could allow inflation to top its 2 percent target.
The weaker dollar helped lift oil and metals prices, lifting
commodity-related stocks in Europe and Asia.
The pan-European STOXX 600 share index rose 1.4
percent, led higher by a 2.9 percent rise in the basic resources
sub-index and a 2.2 percent gain in banks.
Britain's internationally-focused FTSE 100 index, in
which miners are heavily represented, rose 1.2 percent.
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MSCI's broadest index of Asia-Pacific shares outside Japan
gained 1.4 percent, led by financials and energy
shares. Australia's benchmark index was up 0.4 percent
while Japanese stocks edged higher on a softer yen.
Sterling hit a six-day high of $1.2272 before
retreating, after data showing annual consumer price inflation
in Britain accelerated to 1.0 percent last month from 0.6
percent in August, its biggest jump in two years.
It then jumped as far as $1.2304 after a British government
lawyer said it was "very likely" the UK parliament would have to
ratify the country's eventual exit agreement with the EU.
Sterling last stood at $1.2260, still up 0.7 percent on the
day. British government bond yields fell 3 basis
points to just under 1.1 percent.
"It shows that political uncertainty is a more significant
driver for the pound than the data. The market is short pounds
and is coming off a string of hardline comments from the
government -- this has provided some relief," said Kamal Sharma,
G10 strategist for Bank of America Merrill Lynch in London.
The inflation numbers confirmed that a weak pound since
June's Brexit vote is already pushing up some prices
Data due later is expected to show the U.S. core consumer
price index held steady at 2.3 percent last month, according to
economists polled by Reuters, above the Fed's 2 percent
The dollar eased by 0.1 percent against a basket of
currencies, pulling back further from a seven-month high
hit on Monday, as investors digested recent comments from Yellen
and other Fed officials.
On Monday Vice Chairman Stanley Fischer said economic
stability could be threatened by low rates but it was "not that
simple" for the Fed to hike.
HSBC currency strategist Dominic Bunning said: "It's very
hard for the dollar to maintain a bull run at the moment,
because a stronger dollar acts as a tightening force on the U.S.
economy ... so that makes it harder for the Fed to raise rates
The euro was flat at $1.0995 and the yen was down 0.1
percent at 104.00 per dollar.
The Australian dollar rose to as high as $0.7689
after central bank chief Philip Lowe said he was comfortable
with the exchange rate and China's yuan weakened
marginally to about 6.74 per dollar, the latest in a series of
A decline in stockpiles as the northern hemisphere winter
approaches was also behind oil's push higher.
Brent, the international benchmark, rose 24 cents to
$51.76 a barrel.
The weaker dollar also helped lift copper 0.4
percent to $4,694 per tonne before pulling back to $4,680. Gold
prices also rose, gaining 0.4 percent to $1,260 an ounce.
(Additional reporting by Saikat Chatterjee in Hong Kong, Jemima
Jelly and Patrick Graham in London; Editing by Robin Pomeroy)