Global stocks near 15-month highs; China data weighs on markets

LONDON, July 18 (Reuters) – Global shares held steady near their latest 15-month high and the dollar hit a one-year low as investors shrugged off weak economic data from China and awaited U.S. retail sales. Data and revenue.

Asian shares fell early in the session as markets caught up with growth data from Monday that showed the post-pandemic bounce in China’s economy had ended.

Deutsche Bank said it would cut its forecast for China’s economic growth this year, following similar moves by JP Morgan, Morgan Stanley and Citigroup on Monday.

At 0806 GMT, the MSCI world equity index was little changed at 697.27, having hit 698.39 on Friday, the highest since April 2022 (.MIWD00000PUS).

European shares posted minimal gains, with the STOXX 600 and London’s FTSE 100 both up 0.2% (.STOXX), (.FTSE), and Germany’s DAX (.GDAXI) up just 0.1%.

« China is very important for Europe, » said Fiona Cincotta, senior market analyst at CitiIndex. « There’s a lot of concern about what weakness in China means for Germany and the German economy, and I think we’re seeing that play out in the DAX, which is struggling to push higher. »

Investors awaited US retail sales and industrial production figures later in the session.

The central bank, the European Central Bank and the Bank of Japan hold policy meetings next week.

« Any sense that the Federal Reserve has reached peak interest rates or that they will become less accommodative or more dovish will be the needle that stocks need to move up the next level, » Cincotta said.

Expectations that the central bank and the ECB will diverge on rate hikes have caused the dollar to weaken recently.

Money markets have largely priced in a 25-basis-point rate hike from the central bank at its policy meeting later this month, although there are expectations that rates will fall in December.

Instead, investors expect the ECB and the Bank of England to extend their rate hike cycle.

The U.S. dollar index fell 0.1% to 99.792, its lowest since April 2022 on Friday.

The euro hit a fresh 17-month high of $1.1276 at 0732 GMT.

Euro zone government bond yields fell, with Germany’s 10-year yield at its lowest since July 3 at 2.368%.

Benchmark 10-year notes yielded 3.7579%, down about 4 bps on the day.

Investors are eyeing quarterly results this week, with major banks such as Bank of America ( BAC.N ), Morgan Stanley ( MS.N ) and Goldman Sachs ( GS.N ) reporting earnings.

Tesla ( TSLA.O ) reports later this week, which will allow the market to take a closer look at how major U.S. companies are faring, following the stock’s recent rally.

Oil prices were little changed, with Brent crude at $78.43 a barrel and US West Texas Intermediate crude up 0.16% at $74.27.

Spot gold rose 0.33% to $1,961.1 an ounce.

Report by Elizabeth Howcroft; Additional reporting by Selena Li in Hong Kong

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