U.S. Treasury yields jumped and the U.S. dollar edged up while global stock indexes were mixed to near flat on Friday after data showed U.S. producer prices increased more than expected in January, adding to the view that any interest rate cuts by the Federal Reserve are not imminent.
The producer price index for final demand rose 0.3% last month after declining by a revised 0.1% in December, the Labor Department’s Bureau of Labor Statistics said. Economists polled by Reuters had forecast the PPI rebounding 0.1% following a previously reported 0.2% drop.
A U.S. consumer prices reading earlier this week was also stronger than expected.
The yield on benchmark U.S. 10-year notes rose 5.3 basis points to 4.293%, from 4.24% late on Thursday.
The greenback also gained after the data. Against the yen, the dollar climbed 0.5% to 150.57 yen.
The dollar/yen has been trading near levels that have been typically seen as potential catalysts for official intervention.
Bank of Japan Governor Kazuo Ueda said on Friday that monetary policy would most likely remain accommodative, even after ending negative interest rates, echoing recent reassurances from BOJ officials that have weighed on the yen.
The dollar was last up 0.17% versus the yen at 150.16. The dollar index gained 0.06% at 104.32, with the euro up 0.01% at 1.0772.
"A number like this, it definitely pushes off the Fed for another month or two," said Tom di Galoma, co-head of global rates trading at BTIG in New York, referring to the PPI data.
On Friday, market expectations the Fed will start cutting rates in June were dialed back, with CME’s FedWatch Tool now showing a 69.9% chance for a cut of at least 25 basis points, down from the nearly 90% in the prior session.
On Wall Street, the Dow Jones Industrial Average fell 42.15 points, or 0.11%, to 38,730.97, the S&P 500 gained 0.03 points to 5,029.76 and the Nasdaq Composite lost 23.60 points, or 0.15%, to 15,882.57.
MSCI’s gauge of stocks across the globe rose 2.22 points, or 0.30%, to 752.77. The STOXX 600 index rose 0.62%.
Earlier on Friday, Japan’s benchmark Nikkei rallied to a 34-year high and was on the cusp of eclipsing the all-time peak reached during the heyday of the nation’s bubble economy in the 1980s.
Figures on Thursday showed that Japan and Britain slipped into recession at the end of last year.
With the dollar gaining, gold has been under pressure this week. Gold eased on Friday and was on course for a second straight weekly fall.
Spot gold was down 0.3% to $1,997.87 per ounce.
U.S. crude gained 0.19% to $78.18 a barrel and Brent rose to $82.92 per barrel on the day.
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