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Global stocks tread water ahead of US inflation data

Two sets of US inflation data will be pored over this week for fresh clues over the Fed's monetary policy outlook. (Frederic J. BROWN)
Two sets of US inflation data will be pored over this week for fresh clues over the Fed's monetary policy outlook. (Frederic J. BROWN)

Global markets were in cautious mode Monday with Wall Street marking time while major European stock markets put the brake on following a record run last week as investors wait on key US inflation data.

London, Paris and Frankfurt ended marginally lower after finishing at all-time highs on Friday.

On Wall Street, the S&P 500 finished unchanged, while the Dow edged lower and the Nasdaq rose modestly.

The biggest drama in US equities were huge jumps by so-called meme stocks GameStop and AMC Entertainment after the reemergence of "Roaring Kitty," a social media figure whose posts helped ignite a massive rally in a handful of stocks in January 2021.

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World markets rallied last week on optimism that the US Federal Reserve, the European Central Bank and the Bank of England will soon cut borrowing costs after raising them in efforts to contain soaring prices.

Investors will pore over two sets of US inflation data for April -- the producer price index (PPI) on Tuesday and the consumer price index (CPI) on Wednesday -- for fresh clues about the Fed's monetary policy outlook.

"This week's US inflation updates are likely to be the drivers of equity market direction," said David Morrison, senior market analyst at Trade Nation.

"If the numbers suggest that inflation is continuing to push higher, then that will decrease the probability of rate cuts this year," he said.

An uptick in inflation in recent months has dented hopes that the Fed will start cutting rates as soon as June, and odds-makers now see the possibility of it happening in September.

This week's figures "will provide substantial insights into the likely duration of elevated interest rates," said Fawad Razaqzada, analyst at City Index and Forex.com.

- US-China trade war -

In Asia, indices also fluctuated as traders absorbed weak Chinese data and news that Beijing planned to start selling the first batch of almost $140 billion of bonds to boost the stuttering economy.

The week began on a tepid note after figures showed a drop in a broad measure of credit in China that sparked worries of a further slackening in the world's number two economy.

That came as the Wall Street Journal reported that the White House is looking at almost quadrupling tariffs on Chinese electric vehicles as part of a plan that will also target batteries and solar cells.

A decision, expected on Tuesday according to reports, would come as US President Joe Biden gears up for a rematch with Donald Trump in November's presidential election.

Last month, Biden urged a tripling of tariffs on steel and aluminium as he courted blue-collar voters.

In London, meanwhile, an announcement by Australian mining giant BHP that British rival Anglo American has rejected an improved takeover bid worth £34 billion ($43 billion) as it aims to create a copper titan left the latter's share price off 2.4 percent.

BHP, whose chief executive Mike Henry said a deal would prove a "win-win for BHP and Anglo American shareholders," shed 0.6 percent.

- Key figures around 2030 GMT -

New York - Dow: DOWN 0.2 percent at 39,431.51 (close)

New York - S&P 500: FLAT at 5,221.42 (close)

New York - Nasdaq: UP 0.3 percent at 16,388.24 (close)

London - FTSE 100: DOWN 0.2 percent at 8,414.99 (close)

Paris - CAC 40: DOWN 0.1 percent at 8,209.28 (close)

Frankfurt - DAX: DOWN 0.2 percent at 18,742.22 (close)

EURO STOXX 50: DOWN 0.1 percent at 5,078.96 (close)

Tokyo - Nikkei 225: DOWN 0.1 percent at 38,179.46 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 19,115.06 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,148.02 (close)

Euro/dollar: UP at $1.0792 from $1.0771 on Friday

Dollar/yen: UP at 156.21 yen from 155.78 yen

Pound/dollar: UP at $1.2555 from $1.2525

Euro/pound: DOWN at 85.93 from 85.99 pence

Brent North Sea Crude: UP 0.7 percent at $83.36 per barrel

West Texas Intermediate: UP 1.1 percent at $79.12 per barrel

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