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GLOBAL MARKETS-Dollar rises on inflation data; Wall St. gains

Published 16/10/2015, 01:53 am
© Reuters.  GLOBAL MARKETS-Dollar rises on inflation data; Wall St. gains
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* MSCI Asia-Pacific index hits 2-month high

* Dollar rises, U.S. stocks rise after data, earnings

* U.S. crude dips amid lingering global glut concerns (Updates with U.S. market open, commentary, changes byline, dateline, previous London)

By Sinead Carew

NEW YORK, Oct 15 (Reuters) - The dollar strengthened, helped by stronger-than-expected inflation data, and U.S. stocks were driven higher by the financial sector and bank earnings reports.

The dollar .DXY was up 0.5 percent against a basket of currencies, on track for its biggest one-day gain since Sept. 21. A 0.2 percent rise in September core U.S. consumer prices revived bets domestic inflation is edging closer to the Federal Reserve's 2-percent target.

The data also pushed up U.S. Treasuries yields slightly as it renewed some hopes for a 2015 Federal Reserve rate hike.

"On the margin, today's data lends some credence to the possibility that the Fed could still build a 2015 case for liftoff," said Neil Bouhan, government bond strategist at BMO Capital Markets in Chicago.

U.S. stocks snapped two days of losses, also helped by some strength in third-quarter earnings. While the benchmark S&P 500's financial sector led the pack with banks as the top drivers, results were mixed.

Goldman Sachs (N:GS) GS.N shares fell 1.5 percent to $176.83 after results missed expectations on weak bond trading, but Citigroup (N:C) C.N rose 1 percent after its results beat estimates.

"I think we could be looking at a bumpy, mixed positive session," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York, adding the market could turn as investors digest news through the day.

The Dow Jones industrial average .DJI rose 57.52 points, or 0.34 percent, to 16,982.27, the S&P 500 .SPX gained 9.27 points, or 0.46 percent, to 2,003.51 and the Nasdaq Composite .IXIC added 35.80 points, or 0.75 percent, to 4,818.65.

Crude oil fell on Thursday on expectations U.S. government data will show a rise in inventories. Brent LCOc1 was off 0.9 percent at $48.69 per barrel while U.S. crude was down 1.8 percent at $45.81.

European shares snapped a three-day slide on the prospects of more central bank support. European Central Bank policymaker Ewald Nowotny said it was "quite obvious that additional sets of instruments are necessary" to lift euro zone inflation. ID:nF9N10U01H The regional FTSEurofirst 300 .FTEU3 rose 1.4 percent.

Asian shares hit their highest levels since mid-August, also hoping for stimulus from China and Japan.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 2.1 percent. Japan's Nikkei .N225 gained 1.15 percent, as the second successive fall in manufacturers' sentiment in Japan kept pressure on policymakers to do more.

MSCI's emerging share index .MSCIEF was up 2 percent after a two-day fall and hit its highest level since Aug. 13.

"We are seeing continuous unwinding of bearish bets on emerging currencies generally, as views of 'no U.S. hike this year' are growing," said Seungji Jeon, Samsung (KS:005930) Futures' FX analyst in Seoul.

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