Global stocks at record highs before US inflation data

Marc JonesReuters
MSCI's main all-country world index hit a record high after new peaks in Europe, Asia and the US. (AP PHOTO)
Camera IconMSCI's main all-country world index hit a record high after new peaks in Europe, Asia and the US. (AP PHOTO) Credit: AAP

Global stocks have hit record highs as traders counted down to US data that is expected to show inflation easing and pave the way for the Fed to start its long-awaited interest rate cut cycle as soon as September.

Thursday is a busy day. As well the US CPI figures, Wall Street earnings season are kicking off, Britain has had robust GDP data and some European football success to cheer, and a number of central banks have been juggling interest rates.

Europe's main bourses moved 0.4 per cent-0.7 per cent higher in early trading, which after records in both the US and Tokyo overnight, meant MSCI's main all-country world index scaled its own new peak.

Bond markets and the dollar were broadly steady, keeping the yen on the weak side of 161 per dollar and near its lowest levels in decades, whereas it gave the sterling the room to climb to a four-month high.

Japan's Nikkei rose one per cent to a record 42,426 points, Taiwanese stocks did the same, and Australia's ASX 200 closed within a whisker of its record top.

That was after another surge in Nvidia and other Wall Street heavyweights had seen both the Nasdaq and S&P 500 close at new peaks.

"The main driver is really the prospect of interest rate cuts," said Shane Oliver, chief economist and head of investment strategy at AMP in Sydney.

"If we get a good inflation read, it will tick one of Powell's boxes."

US Federal Reserve chair Jerome Powell told lawmakers on Wednesday that "more good data" would build the case for the bank to cut interest rates.

Futures pricing implies about a 75 per cent chance of a cut in September.

Economists forecast annual US CPI slowed to 3.1 per cent in June from 3.3 per cent in May.

The Bank of Korea stood pat on interest rates but left out a warning on inflation, while governor Rhee Chang-yong told reporters it was time to prepare to pivot to rate cuts.

Malaysia held its rates steady too.

The US earnings season begins later in the day, with results from Delta Air Lines and consumer bellwether PepsiCo, followed by bank results on Friday.

China's yuan rallied from an almost eight-month low to 7.2701 per dollar.

China stocks chimed with the market momentum, but a drumbeat of disappointing data and talk of tariffs in its major export markets have made rallies hard to sustain. China GDP print is due on Monday.

In Europe, sterling's four-month high of $US1.2874 came after British GDP data beat expectations and after the Bank of England's chief economist had sounded vaguer about the timing of rate cuts than many traders had expected.

The euro also ticked higher to $US1.0847.

The yen slipped as far as 161.7 per dollar. Data showed core machinery orders unexpectedly down for a second month, challenging expectations for interest rates to rise.

The New Zealand dollar found support at its 200-day moving average and traded at $US0.6095.

The Australian dollar rose 0.2 per cent to a six-month high of $US0.6763.

Treasuries were steady in Europe, with US two-year yields holding at 4.62 per cent and benchmark 10-year yields at 4.29 per cent.

In commodity trade, oil prices edged higher on signals of strong US petrol demand.

Brent futures rose 16 cents, or 0.2 per cent, to $US85.24 a barrel.

US crude climbed 20 cents, or 0.25 per cent, to $US82.30 a barrel.

Gold also crept 0.5 per cent higher to $US2,381 an ounce.

After a sell-off last week, bitcoin has steadied about $US58,900.

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