World shares chalked up their longest losing streak in well over a year on Thursday as bets on rising U.S. interest rates propelled the dollar and benchmark bond yields higher and beaten-up commodity markets struggled to find a footing.
With global energy stocks on the run, MSCI’s 46-country All World index .MIWD00000PUS fell for a sixth consecutive day, the longest slide since the start of 2016 and down from an all-time high set just over a week ago.
Europe’s main markets .GDAXI.FCHI.FTSE were also stuck in reverse though the euro EUR=EBS was one of the few currencies to make headway against the dollar as
the European Central Bank kept its record low interest rates unchanged.
ECB head Mario Draghi holds a news conference at 1330 GMT and focus is squarely on his view of the recent pick up in the euro zone and whether any plans are being readied in case of nerves around upcoming Dutch and French elections.
“Draghi is under a lot of pressure, we think from the Germans, to unwind all of this (stimulus) by the time he is replaced,” said Hani Redha, managing director of global multi asset at fund manager PineBridge Investments.
“We think that would be a mistake, the approach is working, it just needs a lot more time.”
Economic data out of China continued to surprise, with consumer inflation coming in well under expectations at an annual 0.8 percent, largely due to falling food prices.
Producer prices still rose at the fastest pace since 2008, keeping alive hopes that China had stopped exporting disinflation to the rest of the world.
That inflationary pulse was timely given oil prices dived 5 percent on Wednesday to their lowest this year as U.S. crude inventories ballooned to a record high. [O/R]
The market did pare some losses on Thursday, with U.S. crude CLc1 up 30 cents at $50.58 and Brent crude LCOc1 bouncing 43 cents to $53.54 a barrel.