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GLOBAL MARKETS-Stocks, euro inch higher on ECB stance

Published 2019-04-10, 02:59 p/m
GLOBAL MARKETS-Stocks, euro inch higher on ECB stance
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* Euro zone bond yields, euro decline on dovish ECB

* U.S. stocks gain on tame inflation reading for March

* Oil rallies on steep U.S. gasoline stock draw

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Herbert Lash

NEW YORK, April 10 (Reuters) - The euro rose and world stock markets edged higher on Wednesday amid tame U.S. inflation data and as the European Central Bank left its ultra-easy policy stance unchanged but warned that economic risks remained to the downside.

ECB President Mario Draghi confirmed policymakers were considering whether measures are needed to mitigate the impact on European banks of the central bank's negative deposit rates. bank stocks .SX7P declined and the yield on Germany's benchmark 10-year bond DE10YT=RR fell to a one-week low of negative 0.038%, about 0.05 percentage point from 2-1/2 year lows they hit last month.

Major European stock indexes rose, though sentiment was capped by U.S. threats earlier this week to slap tariffs on goods from the European Union.

Separately, data showed U.S. consumer prices increased by the most in 14 months in March but underlying inflation remained benign against a backdrop of slowing global economic growth. from a March 19-20 meeting of Federal Reserve policymakers show they saw the U.S. economy weathering a global slowdown without a recession in the new few years. debated how to manage the Fed's massive holding of bonds and agreed to be patient about any changes to its interest rate policy.

MSCI's all-country equity index .MIWD00000PUS gained 0.13%, while the pan-regional FTSEurofirst 300 index .FTEU3 of leading shares closed up 0.17%.

Reckitt Benckiser shares fell 6.5% to weigh on Britain's blue chip FTSE 100 index .FTSE after the U.S. Justice Department accused Indivior Plc INDV.L , a former RB unit, of illegally boosting prescriptions for its blockbuster opioid addiction treatment. Indivior shares tumbled 71.6%.

On Wall Street, the Dow Jones Industrial Average .DJI fell 25.93 points, or 0.1%, to 26,124.65. The S&P 500 .SPX gained 4.8 points, or 0.17%, to 2,883 and the Nasdaq Composite .IXIC added 29.13 points, or 0.37%, to 7,938.41.

Industrial stocks .SPLRCI were down 0.18%, as Boeing (NYSE:BA) Co BA.N shares continued to weigh after the company on Tuesday reported zero new orders for its 737 MAX jet following a worldwide grounding of the aircraft in March.

Boeing's shares fell 1.1%, keeping the Dow Industrials in the red. Treasury yields slipped, weighed down by the tepid U.S. inflation data for March, which reinforced expectations that the Fed would hold rates steady or possibly cut them by the end of the year.

"There is a persistent trend of inflation underperformance that may soon become problematic for the Fed," said Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets in New York.

The benchmark 10-year U.S. Treasury note US10YT=RR rose 6/32 in price to push its yield lower to 2.4774%.

The euro recouped earlier losses after Draghi underscored the risks facing the euro zone economy.

The dollar index .DXY fell 0.08%, with the euro EUR= up 0.11% to $1.1273. The Japanese yen JPY= strengthened 0.19% versus the greenback at 110.95 per dollar.

Oil prices rallied more than 1 percent after U.S. data showing a deep drawdown in gasoline stocks overshadowed crude inventories rising to 17-month highs, and as sanctions and blackouts in Venezuela helped tighten global supplies.

International benchmark Brent futures LCOc1 settled up $1.12 to $71.73 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 oil futures climbed 63 cents to settle at $64.61 a barrel.

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