The MSCI All Country Stock index was flat at 780.9 points, down around 2% on the week, though still more than 7% higher for the year
Global shares were little changed on Friday in subdued trading as investors waited for key U.S inflation figures that will shape the Fed’s thinking on interest rates when it meets mid-June.
The dollar was steady against rival currencies ahead of the U.S. inflation data.
Oil was marginally weaker after Fed officials said it was too soon to start considering rate cuts, and following a surprise build in U.S. gasoline stocks.
The MSCI All Country Stock index was flat at 780.9 points, down around 2% on the week, though still more than 7% higher for the year.
In Europe, the STOXX index of 600 companies was lower and headed for a second week of declines, though still likely to show gains for May.
The big driver in the market at the moment is the same old story of when is the Federal Reserve is going to pivot and start lowering rates, according to Mark Ellis, CEO of Nutshell Asset Management.
The VIX index, dubbed Wall Street’s ‘fear gauge’, has begun rising again, he said.
Although stock markets have performed strongly in May, just in the last week it seemed very stressed. I’m expecting that to subside today, and seasonally the first week of June is pretty good for markets, he said.
Policymakers at the Fed who next meet on June 11-12, said on Thursday that they continue to expect inflation to drop this year even as the labour market stays strong, leaving them in no hurry to cut borrowing costs.
There will be a fresh read on inflation’s progress at 1230 GMT with the Commerce Department’s publication of the monthly U.S. PCE price index.
Economists estimate it added 2.7% in April from a year ago; the Fed targets a 2% pace.
Euro zone inflation figures are due at 0900 GMT, though analysts say the data is not likely to alter the ECB’s widely flagged intention to reduce interest rates by 25 bps when it meets next Thursday, though the path of further cuts remains unclear.
Ellis said expectation that the European Central Bank will move before the Federal Reserve in cutting rates, the opposite to what has historically happened, is largely priced into markets.
U.S. stock index futures, were flat to weaker ahead of Wall Street’s open, where the opening tone will be determined by the inflation numbers.
