NEW YORK, Feb 14 — Wall Street equity indexes closed up more than 1 per cent yesterday and US Treasury yields slipped as investors bet that key US economic data due out today would show inflation is easing.

The US Bureau of Labour Statistics is scheduled today to release January’s Consumer Price Index (CPI) data, which is expected to show how effective Federal Reserve policy tightening has been in taming inflation so far.

US equities have gained ground so far this year, as investors put their bets on the prospect of slowing inflation allowing the Federal Reserve to slow or pause rate hikes.

“Investors are positioning themselves ahead of what they believe will be a favourable inflation report which could trigger an upward move in equity prices,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

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With a host of economic reports due out this week including retail sales and industrial production, Brian Klimke, investment director at Cetera Investment Management LLC, said he expects more volatility as investors reconcile the data with expectations around what the Fed might do.

The Dow Jones Industrial Average rose 376.66 points, or 1.11 per cent, to 34,245.93, the S&P 500 gained 46.83 points, or 1.14 per cent, to 4,137.29 and the Nasdaq Composite added 173.67 points, or 1.48 per cent, to 11,891.79.

The pan-European STOXX 600 index had closed up 0.90 per cent. Emerging market stocks rose 0.07 per cent.

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The MSCI All-World index, which includes stocks across the globe, gained 0.88 per cent yesterday. After rising more than 8 per cent in the first five weeks of 2023, the global index fell 1.3 per cent last week.

In US Treasuries, benchmark 10-year yields turned lower after earlier hitting their highest level since January 5.

Benchmark 10-year notes were down 3.4 basis points to 3.709 per cent, from 3.743 per cent late on Thursday. The 30-year bond US30YT=RR was last down 4.1 basis points to yield 3.7853 per cent, from 3.826 per cent. The 2-year note US2YT=RR was last was up 1.1 basis points to yield 4.5238 per cent, from 4.513 per cent.

After rising earlier, the dollar was lower against a basket of major currencies, recently down 0.319 per cent, with the euro up 0.44 per cent to US$1.0722.

However, the greenback touched its highest against the rate-sensitive Japanese yen since January 6 on bets the Fed would keep monetary policy tight for longer.

“The market doesn’t want to be short dollar/yen ahead of CPI tomorrow,” said Marc Chandler, chief market strategist at Bannockburn Forex in New York.

Also sources had said on Friday that former Bank of Japan board member Kazuo Ueda is set to become the next governor. In an interview the same day, Ueda said it was appropriate for the BOJ to maintain its current ultra-easy policy.

The Japanese yen weakened 0.63 per cent versus the greenback at 132.27 per dollar, while Sterling was last trading at US$1.2136, up 0.65 per cent on the day.

Oil prices rebounded from early losses to settle slightly higher as investors weighed Russian plans to cut crude production and short-term demand concerns ahead of US inflation data.

US crude settled up 0.5 per cent at US$80.14 per barrel and Brent finished at US$86.61, up 0.25 per cent for the day.

Spot gold dropped 0.6 per cent to US$1,853.82 an ounce. US gold futures GCc1 fell 0.66 per cent to US$1,850.50 an ounce. — Reuters