Picture: REUTERS
Picture: REUTERS

New York — The US dollar fell and was on course for its worst week in more than a month, while treasury yields fell after underlying US inflation data, released on Friday, offset higher petrol prices and strong retail sales in the wake of disruptions caused by hurricanes.

Stocks on major world stocks, however, hit their fourth record in a row, with Wall Street moving higher as some investors bet that the inflation data could curb future Federal Reserve’s rate rises.

European shares also rose to their highest level in nearly four months, helped by some well-received corporate earnings updates.

US consumer prices recorded their biggest increase in eight months in September as petrol prices soared in the wake of hurricane-related production disruptions at oil refineries in the Gulf Coast area, but underlying inflation remained muted.

US retail sales recorded their biggest increase in two and a half years in September, likely due to reconstruction and clean-up efforts in areas devastated by Hurricanes Harvey and Irma boosting demand for building materials and motor vehicles. "Its a favourable environment for risk taking. Economic and earnings growth with slow inflation means rates stay low and the dollar trends lower and risk-taking is rewarded," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

The Dow Jones Industrial Average rose 54.25 points, or 0.24%, to 22,895.26, the S&P 500 gained 6.23 points, or 0.24%, to 2,557.16 and the Nasdaq Composite added 23.17 points, or 0.35%, to 6,614.68.

The pan-European FTSEurofirst 300 index rose 0.29% and MSCI’s gauge of stocks across the globe gained 0.37%. Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan hit a roughly 10-year high.

"With a December rate hike almost fully priced in by now, however, investors are starting to focus on the Fed’s still cautious forward guidance and hence the limited scope for a further increase of the dollar’s rate advantage," Crédit Agricole strategists said in a note.

The US dollar index fell 0.14%, with the euro up 0.16% to $1.1848.

European Central Bank policy makers broadly agreed to extend asset purchases at a lower volume at their October policy meeting with views converging on a nine-month extension, sources at the central bank told Reuters.

Digital currency Bitcoin was up 5.9% $5,767.33 after the previous session’s 12.9% gain pushed it above $5,000 for the first time.

Benchmark 10-year notes last rose 7/32 in price to yield 2.2998%, from 2.323% late on Thursday. The 30-year bond last rose 9/32 in price to yield 2.8388%, from 2.853% late on Thursday.

Oil prices firmed on Friday as bullish news from strong Chinese oil imports to turmoil in the Middle East put Brent on track for a nearly 3% weekly gain. US crude rose 1.11% to $51.16 a barrel and Brent was last at $56.79, up 0.96% on the day.

Reuters

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