World stocks traded higher and bonds and currencies steadied on Wednesday, largely unfazed by ratings agency Fitch downgrading its China outlook, while traders awaited crucial U.S. inflation data due later in the day.
Europe’s broad STOXX 600 index rose 0.6 per cent, recovering after a drop the day before and heading back toward a record high, while MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent.
Resilient economic data, particularly in the United States, matched with expectations that central banks will be cutting rates this year, have boosted stocks in most markets around the world.
But fears that sticky inflation in the United States means the Federal Reserve won’t be cutting rates till later in the year remains a risk.
Wednesday’s U.S. consumer price index data for March, due at 8:30 a.m. EDT, will therefore be crucial. Market pricing now reflects roughly a 50-per-cent chance the first Fed rate…
