LONDON: Stock markets mostly climbed and the dollar advanced Wednesday as traders awaited key US inflation numbers that could give a clearer idea on when the Federal Reserve may hike interest rates.
News that US President Joe Biden's $1.2-trillion infrastructure spending bill had finally passed the Senate helped Wall Street hit new records overnight, while Asian and European equities largely rose Wednesday.
"The major event on today's economic calendar is the US consumer price inflation report," noted Ipek Ozkardeskaya, senior analyst at Swissquote.
"A consensus of analyst expectations hint that the US consumer prices may be stabilising near the 5.4-percent level printed last month."
Ozkardeskaya added however that the number could undershoot expectations following recent falls in oil prices.
Equities have had a largely positive week after a recent run of pressure caused by the prospect of higher interest rates to tame soaring inflation, as well as by the fast-spreading Delta variant of the coronavirus, which has dampened oil demand prospects.
There are concerns also about China's crackdown on sectors including tech and private tuition.
Defensive, technology stocks power European markets to record close
US July inflation data could have a bearing on the Fed's decision on when to start tapering the vast bond-buying programme that has been a major pillar of support for global markets since April last year.
Soaring prices in recent months and blockbuster jobs creation have ramped up pressure on the bank to tighten policy in order to prevent the economy from overheating.
And with several officials indicating their support for a tightening before year's end, the question now is when -- not if -- it will move, leaving observers to suggest an interest rate hike as early as 2022.
"While the Fed may well still be able to argue the continued rise in prices is transitory... if June's number doesn't mark the high-water mark, then Fed officials may start to shift a little bit more uncomfortably as we head into the autumn," said CMC Markets analyst Michael Hewson.
"However, whatever happens this week the direction of travel towards a taper seems a little more straightforward than it was a couple of months ago, given recent jobs data."
Key figures around 1115 GMT
London - FTSE 100: UP 0.5 percent at 7,194.64 points
Frankfurt - DAX 30: FLAT at 15,773.34
Paris - CAC 40: UP 0.3 percent at 6,839.87
EURO STOXX 50: UP 0.2 percent at 4,196.12
Tokyo - Nikkei 225: UP 0.7 percent at 28,707.51 (close)
Hong Kong - Hang Seng Index: UP 0.2 percent at 26,660.16 (close)
Shanghai - Composite: UP 0.1 percent at 3,532.62 (close)
New York - Dow: UP 0.5 percent at 35,264.67 (close)
Euro/dollar: DOWN at $1.1713 from $1.1722 at 2040 GMT
Pound/dollar: DOWN at $1.3814 from $1.3840
Euro/pound: UP at 84.79 pence from 84.67 pence
Dollar/yen: UP at 110.74 yen from 110.58 yen
Brent North Sea crude: DOWN 1.0 percent at $69.92 per barrel
West Texas Intermediate: DOWN 1.1 percent at $67.55 per barrel
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