European and US equities push higher, US inflation remains mute

London, March 10 (AFP/APP): European and US equities mostly pushed higher and US inflation remained muted as the massive $1.9-trillion stimulus programme neared the legislative finish line on Wednesday.

This year’s global equities rally has recently hit an air pocket over fears over the prospect of soaring inflation and rising interest rates as the global economy emerges from the deadly coronavirus crisis. As approval of Biden’s vast Covid-19 stimulus nears, investor focus has been on the impact of an expected post-lockdown spending splurge by the government and Americans.

Thus, markets were paying keen attention to US consumer price inflation data for February, which in the event rose only by 0.1 percent over the month excluding volatile food and energy prices. Annual “core” inflation, actually dipped a tenth of a percentage point to 1.3 percent. “The key takeaway from the report is the recognition that it didn’t contain any headline surprises to fan the flames of inflation concerns,” said Patrick J. O’Hare at Briefing.com.

Inflation concerns had recently pushed investors to sell their holdings of government bonds, as they worried that inflation would eat into their returns. Fears that inflation would force the Federal Reserve to begin winding back ultra-loose monetary policies — including record low interest rates — that have been a key driver of the year-long equities rally, saw investors sell off equities.