(Updates prices, adds U.S. retail sales reaction)
By Ian Chua
LONDON, Feb 13 (Reuters) - An unexpected rise in U.S. retail
sales data on Wednesday helped to lift some of the gloom
surrounding the world's biggest economy, sending European stocks
and the dollar higher and setting Wall Street on track for an
upbeat start.
The closely-watched report showed retail sales rising 0.3
percent in January, soundly beating forecasts of a 0.2 percent
fall, and easing views that a weakening consumer sector would
send the U.S. economy into recession.
(For details please double click on [])
"It is somewhat reassuring to the market that had been
concerned with a slowdown in consumer spending, which of course
raises the risk of a recession," said Omer Esiner, market
analyst at Ruesch International in Washington. "On balance, the
report is dollar positive, although I don't think it changes the
outlook for further rate cuts. But in the near term, it does
ease some recession concerns."
U.S. stock index futures <SPc1><DJc1><NDc1> jumped after the
data, which will help to set the tone for Federal Reserve
Chairman Ben Bernanke's congressional testimony on Thursday.
Tuesday's news that billionaire investor Warren Buffett had
offered to reinsure $800 billion in municipal debt guaranteed by
bond insurers had helped to soothe worries about further fallout
from the credit crisis, although doubts have started to creep
in.
The FTSEurofirst 300 <> index of top European shares
reversed early losses to be up 0.2 percent, with Germany's DAX
<> also climbing 0.2 percent. Britain's FTSE 100 <>
pared losses to be down a modest 0.3 percent.
MSCI's main world equity index <.MIWD00000PUS> was flat
after falling in early trade. Earlier, Japan's Nikkei <>
edged up 0.4 percent, while MSCI's measure of other Asian stock
markets <.MIAPJ0000PUS> slipped 0.2 percent.
DOLLAR UP
The dollar climbed against a basket of major currencies
after the sales report, pushing the dollar index <.DXY> up 0.2
percent to 76.440. The greenback rose 0.7 percent to a one-month
high of 108.11 yen <JPY=>, while the euro slipped 0.1 percent to
$1.4571 <EUR=>.
Sterling was flat, pulling back from a one-week high of
$1.9655 <GBP=> set earlier after the Bank of England's (BoE)
quarterly inflation report signalled that interest rates would
be eased only modestly. []
"If there is one thing we can take away from the Feb
inflation report, it is that the BoE is trying to tell us that
interest rates are not going to fall as much and as quickly as
the market assumes," said Jodie Tiller, an economist at CIBC.
Stronger stock markets weighed on demand for safe-haven
government bonds, sending yields higher. The two-year Schatz
yield <EU2YT=RR> climbed to 3.15 percent, while the U.S.
two-year Treasury yield <US2YT=RR> edged up to 1.94 percent.
Among commodities, U.S. crude <CLc1> was little changed just
below $93 a barrel, remaining subdued after a three-session
rally fizzled out on Tuesday. Copper <MCU3> fell around 3
percent as Chinese buyers, returning to the market after the
lunar New Year holidays, proved unwilling to push prices higher.
(editing by David Stamp)
