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GLOBAL MARKETS-U.S. data and Fed caution keep pressure on stocks, dollar
* European stocks, dollar tumble anew as sell-offs continue
* Euro surges above $1.12,
* Bond yields climb again after spiking on Wednesday
* Kiwi tumbles as NZ central bank adopts easing bias
(Adds inflation, Russia cenbank, U.S. futures)
By Marc Jones
LONDON, April 30 (Reuters) - World stock markets and the
dollar remained in sharp sell-off mode on Thursday, having been
jolted sharply lower by weak U.S. growth data and cautious
comments from the Federal Reserve.
Asian and European stocks continued a two-day decline for
equity markets worldwide, with Europe's FTSEurofirst 300
down 0.3 percent and heading for its worst week of the
year.
The slide of more than 3 percent is being compounded by this
week's jump in bond yields and a surge of more than 2 percent in
the euro to above $1.12, all of which are threatening to
dampen the region's recovery prospects.
Benchmark German Bund yields kept on climbing, having posted
their biggest daily rise in two years on Wednesday on robust
German inflation and a pick-up in ECB bank lending figures.
While inflation data for the euro zone showed the currency
bloc ended four months of deflation in April, with consumer
prices unchanged from year-ago levels, removing the threat of
persistent price declines as energy costs pushed higher, some
cautioned that the spectre of deflation was not entirely gone.
"A flat print is far from a sufficient reason to pop the
champagne corks," RBC Capital Markets economist Timo del Carpio
said in a note to clients. "There are still real risks
associated with a prolonged period of low-but-positive inflation
rates across the euro area."
U.S. stock index futures were 0.2 percent lower, a
day after data showed that U.S. economic growth slowed to a
crawl in the first quarter, and ahead of earnings from Coca-Cola
, ConocoPhillips (NYSE: COP - news) and Colgate-Palmolive.
Jefferies' global equity strategist Sean Darby said markets
were now having to readjust fast to the changing fortunes of the
U.S. and Europe.
"The U.S., the U.S. dollar and the U.S. economy were very
heavily consensus trades at the end of last year," he said.
"Trades around that, for example weak oil price, strong
dollar, weak euro, have also been very consensus over the last
couple months. That easy money has probably played itself out
... There is a bit more unwinding to go."
The disappointing news on the world's biggest economy comes
on top of a worrying slowdown in China and persistent fears
about Europe as Greece scrambles to avoid bankruptcy.
The Federal Reserve said on Wednesday that the dip in the
U.S. economy was probably due to "transitory" factors. But,
combined with concerns about the labour market, traders all but
crossed June to September from the list of possible start dates
for Fed rate rises.
Central banks and the cheap money they are pumping into the
world's still-wobbly economy remain the underlying theme for
markets.
New Zealand's central bank became the latest to say it could
cut interest rates if domestic momentum weakened.
Russia cut rates by one-and-a-half percentage points, having
had to jack them up last year following the slump in oil prices
and the Ukraine crisis.
The rouble firmed after the central bank announcement,
having been down prior to the decision, as there had been
speculation that the bank would opt for a bigger rate cut. At
1047 GMT the rouble was at 51.23 against the dollar, still down
0.7 percent on the day.
U.S. crude oil hit a five-month high as the dollar slipped
to its lowest since February and as more evidence emerged of a
gradual balancing of the U.S. domestic market.
OIL SURGE
Europe's slide mirrored overnight moves in Asia. MSCI (NYSE: MSCI - news) 's
broadest index of Asia-Pacific shares outside Japan
fell 1.1 percent as South Korean, Australian,
Chinese and Hong Kong shares all suffered losses.
Japan's Nikkei slumped 2.6 percent, extending losses
after the Bank of Japan kept monetary policy unchanged. The
decision was expected but disappointed some participants who had
bet it may ramp up its already massive stimulus measures.
"Risk has been building in the markets for weeks - the mass
stock market trading account openings in China, the rally in
Europe as the ECB ploughs on with its 65 billion euro a month QE
programme," IG (LSE: IGG.L - news) market strategist Evan Lucas said.
(Additional reporting by Lionel Laurent; Editing by Louise
