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GLOBAL MARKETS-Stocks, U.S. dollar inch higher on ECB stance

Published 11/04/2019, 02:00 am
Updated 11/04/2019, 02:10 am
GLOBAL MARKETS-Stocks, U.S. dollar inch higher on ECB stance
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* Euro zone bond yields, euro decline on dovish ECB

* U.S. stocks gain on tame inflation reading for March

* Oil rallies on steep U.S. gasoline stock draw

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh (Adds U.S. market open, byline, dateline; previous LONDON)

By Herbert Lash

NEW YORK, April 10 (Reuters) - The U.S. dollar and world stock markets edged higher on Wednesday amid tame U.S. inflation data and as the European Central Bank left its ultra-easy policy stance unchanged but warned that economic risks remained to the downside.

ECB President Mario Draghi said economic data was weak and confirmed policymakers were considering whether measures were needed to mitigate the impact on European banks of the central bank's negative deposit rates. bank stocks .SX7P declined and the yield on Germany's benchmark 10-year bond DE10YT=RR fell to a one-week low of negative 0.038%, about 0.05 percentage point from 2-1/2 year lows they hit last month.

Separately, data showed U.S. consumer prices increased by the most in 14 months in March but underlying inflation remained benign against a backdrop of slowing global economic growth. ID:nL1N21R1K4

The Federal Reserve will release minutes from its March meeting at 2 p.m. ET (1800 GMT), providing insight into the thinking behind its move to suspend rate hikes this year.

MSCI's all-country equity index .MIWD00000PUS gained 0.09%, while the pan-European STOXX 600 index .STOXX rose 0.21%.

Reckitt Benckiser shares fell 6% to weigh on Britain's blue chip FTSE 100 index .FTSE after the U.S. Justice Department accused Indivior Plc INDV.L , a former RB unit, of illegally boosting prescriptions for its blockbuster opioid addiction treatment. Indivior shares tumbled 71.5%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 15.93 points, or 0.06%, to 26,134.65. The S&P 500 .SPX gained 5.28 points, or 0.18%, to 2,883.48 and the Nasdaq Composite .IXIC added 35.57 points, or 0.45%, to 7,944.85.

Industrial stocks .SPLRCI were down 0.38%, as Boeing (NYSE:BA) Co BA.N shares continued to weigh after the company on Tuesday reported zero new orders for its 737 MAX jet following a worldwide grounding of the aircraft in March.

Boeing's shares fell 1.26%, keeping the Dow Industrials in the red. Treasury yields slipped, weighed down by the tepid U.S. inflation data for March, which reinforced expectations that the Federal Reserve would hold interest rates steady or possibly cut them by the end of the year.

"There is a persistent trend of inflation underperformance that may soon become problematic for the Fed," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

The benchmark 10-year U.S. Treasury note US10YT=RR rose 7/32 in price to push its yield lower to 2.4756%.

The euro fell as Draghi underscored the risks facing the euro zone economy, allowing the dollar some respite from recent selling.

The dollar index .DXY , tracking it against six major currencies, rose 0.02%, with the euro EUR= down 0.06% to $1.1254. The Japanese yen JPY= strengthened 0.20% versus the greenback at 110.94 per dollar.

Oil prices rose after U.S. data showing a hefty drawdown in gasoline stocks overshadowed crude inventories rising to their highest in more than a year, and as sanctions and blackouts in Venezuela helped tighten global supply.

International benchmark Brent futures LCOc1 rose 57 cents to $71.18 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 oil futures climbed 26 cents to $64.24 a barrel.

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