The FTSE All-World Index hit an all-time high earlier in the session before falling at noon in New York, taking the benchmark global equity index’s rise to just 0.9% so far in June .
Wall Street’s blue-chip S&P 500 index edged down 0.1%, after hitting a new high on Thursday, while the tech-focused Nasdaq Composite was flat.
Momentum was stronger across the Atlantic, where the Stoxx Europe 600 closed 0.7% higher to another record – the fourth consecutive week that the benchmark index rose. This follows an upward revision of growth forecasts for the euro area by the European Central Bank on Thursday.
London’s FTSE 100 index rose by the same margin for its best weekly performance since early May.
“The economic data all continue to improve, but everyone was expecting it,” said Caroline Simmons, UK investment director for UBS Wealth Management. “People are now waiting to see what happens with central banks. ”
Next week’s Fed meeting will be closely watched after Vice President Randal Quarles called for talks to cut his $ 120 billion in monthly bond purchases that have supported financial markets since March 2020.
“The Fed is likely to start talking about reducing asset purchases more openly over the next couple of months, with a view to making some reduction next year,” Simmons said.
This week’s rally in US Treasuries has run out of steam. Traders anticipated that the Fed would look beyond high inflation in the United States and stick to its view that high price hikes were a temporary effect of reopening industries.
The yield on the 10-year note was little changed at 1.46% on Friday, although it remained around its lowest level since early March. The equivalent yield of the German Bund was also stable at minus 0.27 percent.
Data on Thursday showed that headline consumer price inflation in the United States rose 5% in the 12 months to May, the biggest increase since 2008. Investors dismissed the jump “as primarily being due to the price normalization linked to the pandemic, ”said Daiwa economist Chris Scicluna. .
Credit Suisse, however, warned in a research note against a “high level of investor complacency”.
“If another set of high inflation indicators prompts central banks. . . to indicate less patience to keep monetary conditions easy, markets could be caught off guard, ”the bank said.
The dollar rose 0.6 percent against a basket of peers, while the euro lost 0.5 percent against the greenback to buy $ 1.2096. The British pound weakened by the same amount to $ 1.4098.
Brent crude, the international benchmark for oil, gained 0.5% to $ 72.92 per barrel, its highest level since May 2019.