(Bloomberg) — Global stocks extended a record high and U.S. Treasuries were steady amid growing confidence inflation will prove transitory, leaving scope for continued central-bank support.
The MSCI All Country World Index was poised for a fourth weekly advance. S&P 500 Index futures were little changed after the benchmark gauge scaled a new high Thursday. Vertex Pharmaceuticals Inc. tumbled 12% in premarket trading after halting the development of a therapy for a rare genetic disorder.
Faster-than-expected U.S. consumer-price growth for May was largely driven by categories associated with economic reopenings, bolstering the view price pressures may ease later in the year. With the Federal Reserve setting a high bar for reconsidering its dovish stance, the data ended up stoking risk appetite across global markets.
“The bond market is falling in line with the Fed’s thinking that inflation is transitory and does not warrant tapering of monetary stimulus any time soon,” said Anu Gaggar, senior global investment analyst at Commonwealth Financial Network.
The U.S. central bank’s view that inflationary pressures are temporary now dominates global markets, signaling any changes in ultra-accommodative policy would happen very gradually. That approach was also reinforced across the Atlantic Thursday, as the European Central Bank raised its inflation forecast and renewed its pledge to maintain faster emergency bond-buying to sustain the euro area.
The 10-year U.S. Treasury yield held near 1.43%, its lowest point since early March. The benchmark rate is heading for a 12 basis-point decline this week.
European stocks rallied, with the Stoxx 600 gauge heading for a fourth weekly increase, as investors relished the prospects of continued policy support. Rallies in emerging markets and commodities also underscored the return of risk appetite.
Vertex fell after halting its experimental treatment for an inherited disease that affects the liver and lungs. Its rival, Grifols SA, jumped 8% in Madrid.
Elsewhere, crude oil consolidated above $70 a barrel amid an improving demand outlook. Bitcoin extended its rebound to a third day, trading around $37,000. Later Friday, investors will be keeping an eye on the opening of the Group of Seven leaders’ summit in the U.K.
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These are some of the main moves in markets:
The Stoxx Europe 600 rose 0.4% as of 10 a.m. London timeFutures on the S&P 500 were little changedFutures on the Nasdaq 100 were little changedFutures on the Dow Jones Industrial Average rose 0.1%The MSCI Asia Pacific Index rose 0.2%The MSCI Emerging Markets Index rose 0.3%
The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.2166The Japanese yen fell 0.2% to 109.54 per dollarThe offshore yuan was little changed at 6.3867 per dollarThe British pound fell 0.1% to $1.4156
The yield on 10-year Treasuries was little changed at 1.43%Germany’s 10-year yield declined three basis points to -0.29%Britain’s 10-year yield declined six basis points to 0.69%
Brent crude rose 0.3% to $73 a barrelSpot gold fell 0.2% to $1,895 an ounce
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