By Tom Westbrook
Feb 16 (Reuters) – Shares rose on Thursday as economic data around the world fueled hopes that the global economy would not suffer as hard a landing as feared a few months ago, despite interest rates. They threaten to stay high longer than expected.
* The pan-European STOXX 600 index rose 0.5%, while London’s FTSE 100 continued its recent run of all-time highs on the back of a flurry of bank buybacks, which pushed their stocks higher. The French CAC 40 rose 0.8%, remaining one step away from its all-time highs.
* The MSCI global equity index rose 0.3%, on track to recoup last week’s losses and gain more than 1% this week. US equity futures rose slightly.
* U.S. retail sales data, which posted the biggest gain in nearly two years in January, along with more subdued inflation and rising consumer spending in the U.S., in the zone euro and the United Kingdom, made investors more confident in the economic outlook.
* The mood pushed the greenback below six-week highs against the yen, yuan and New Zealand dollar, although losses were limited as the interest rate outlook continues to weigh more.
* The 10-year Treasury yield, which rises when bond prices fall, hit its highest level since early January but then fell 3 basis points on the day to 3.78%.
* Equities – with the Nasdaq up 15% so far this year – are clinging to the positives, while in interest rate markets investors are quickly dismissing hopes of declines later in 2023.
* Just a few weeks ago, US interest rate futures hinted that the federal funds rate, currently pegged at 4.5% to 4.75%, would fall below 4.5% d end of the year. They are now targeting rates above 5% throughout the year.
* The dollar index, which was nearly flat at 103.78, points to its third straight weekly gain, the longest streak since September, when the index galloped to 20-year highs.
* The dollar hit a six-week high of 134.36 yen on Wednesday and was around 133.87 yen on Thursday. It was down slightly against the euro at $1.0699.
* Brent crude futures rose 0.3% to $85.13 a barrel. Gold, which does not earn interest and was weighed down by rising Treasury yields, stabilized at $1,835.69 an ounce.
(Reporting by Tom Westbrook and Susan Mathew; Editing in Spanish by Ricardo Figueroa)