(Updates with US markets close and end of month)
* US consumer inflation spiked in April
* Benchmark 10 year returns are trading lower
* Oil prices rise as concerns about Iran’s supplies ease
* Graphic: Global Asset Performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX Rates http://tmsnrt.rs/2egbfVh
By Chibuike Oguh
NEW YORK, May 28 (Reuters). Global equity markets rose as the US dollar rebounded against major currencies on Friday as new data added to concerns about rising inflation and heated activity from pent-up demand.
A report from the US Department of Commerce showed that consumer prices accelerated 3.1% year-to-April, surpassing the Federal Reserve’s 2% target, and posting the largest annual gain since 1992.
Consumer spending, which accounts for more than two-thirds of US economic activity, also rose 11.3% on an annualized basis in the first quarter. This positioned the economy for strong growth as rising vaccinations ease the impact of the COVID-19 pandemic.
The major currency dollar index rose 0.043% to 90.053 after making gains early this morning. The index fell 1.34% over the month.
The benchmark yield on 10-year US Treasuries was 1.5807%, down from 1.61% late Thursday, compared to 1.6310% in late April.
“It’s another indication that accelerating inflation continues to be a problem for many investors, but the markets are showing us that people are happy with it,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
The broadest index of global stocks by MSCI rose 0.31% to 711.15. It was up 1.4% for the month. European stocks rose 0.57% to 448.98 and 2.65% in May.
Investors this week watched as several Fed officials stepped out ahead of Friday’s report to calm inflationary volatility and signal a possible start to talks on rejuvenating stimulus.
On Thursday, Fed vice chairman Randal Quarles joined the chorus and said he was “fully committed” to keeping monetary policy in full swing while jobs rebound.
All major indices posted gains on Wall Street early that afternoon, led by technology, healthcare, real estate and financials.
The Dow Jones Industrial Average rose 0.19% to 34,529.45, the S&P 500 rose 0.08% to 4,204.11, and the Nasdaq Composite rose 0.09% to 13,748.74. During the month the Dow rose 1.94%, the benchmark S&P 500 rose 0.55% and the Nasdaq lost 1.53%.
Overnight in Asia, Tokyo’s Nikkei jumped more than 2% and ended the month 1.17% higher. MSCI’s broadest index for stocks in the Asia-Pacific region outside of Japan rose 0.46% on Friday and 0.3% for the month.
“The market is taking the Fed at its word for now, but if the numbers keep coming this narrative will be challenged as it may not be enough to just cut back asset purchases,” said Brian Price, director of investment management at Commonwealth Financial Network in Boston.
Gold rose above the all-important $ 1,900 level on Friday after data showed US consumer prices rose in April, adding to the attractiveness of bullion as an inflation hedge.
Spot gold rose 0.38% to $ 1,903.3383 an ounce after falling as much as 0.8% earlier. It rose by up to 7.6% over the course of the month.
Oil prices rose slightly on Friday, with Brent holding nearly $ 70 a barrel as strong US economic data and expectations of a recovery in global demand outweighed concerns about higher supply from Iran after the sanctions were lifted.
Brent rose 0.27% to $ 69.65 a barrel and US West Texas Intermediate crude fell 0.36% to $ 66.61 a barrel. Brent and US crude rose 3.57% and 4.31% respectively in May.
(Reporting by Chibuike Oguh in New York; Editing by David Evans and Cynthia Osterman)