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 Illustrating the problems low inflation is causing for central banks
looking to normalise monetary policy in countries such as the United
States and Britain, oil was set to rack up its third consecutive
weekly price slump.
Futures showed Wall Street set to open 0.3 percent higher, with
stocks on course for their best week in a month, as a Fed-induced
weakening of the dollar gave a boost to U.S. exporters.
European shares edged up while euro zone bond yields fell after
assurances from Athens that it will submit reforms needed to unlock
bailout cash. The ECB's trillion euro asset purchase scheme was also
in focus at the end of its second week.
"The outlook for European markets is better than it has been for
years, and the risks now are largely political," said Christian
Schultz, senior economist at Berenberg.
Greek bond yields dropped 45 basis points to 12.10 percent, while
Portuguese, Spanish and Italian equivalents were all down around 1-2
bps. German bonds -- the euro zone benchmark -- were flat at 0.19
percent, just above a record low.
The euro was 0.5 percent higher against the dollar at $1.0712 <EUR=>,
well below Wednesday's high above $1.10 but leaving the single
currency on track for its best week since January 2013.
"What's been dominating the euro over the course of the last week
has been the moves in the dollar. The FOMC announcement was, on
margin, more dovish than expected," said Phyllis Papadavid, senior
global FX strategist at BNP Paribas in London.
The pan-European FTSEurofirst 300 share index was up 0.3 percent at
1.601.42 points, having hit a new 7-1/2 year high just after markets
opened.
The impetus gained from Wednesday's dovish statement from the U.S.
Federal Reserve has begun to ease, but European indices were
supported by gains in the construction sector after Holcim and
Lafarge agreed to new merger terms.
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Asian stocks were broadly unchanged, with MSCI's broadest index of
Asia-Pacific shares outside Japan up 0.05 percent after rallying 1.3
percent the previous day. It was on course for a gain of over 2
percent for the week.
The region's decliners included shares in Hong Kong, Malaysia, South
Korea and Thailand. Australian and Chinese stocks were among the
gainers in a choppy session.
The dollar index was down 0.5 percent at 98.72 but still well
above a low of 96.628 plumbed midweek. The index was on track for
slight loss on the week after touching a 12-year high above 100.00
on March 13.
The dollar saw its biggest fall in six years against the euro on
Wednesday, after the Fed's dovish statement.
In commodities, Brent crude oil was down 1.3 percent at $53.69 a
barrel, hurt by oversupply worries after Kuwait said OPEC had
no choice but to maintain output levels.
U.S. crude was down around 0.5 percent, just above the six-year low
of $42.03 a barrel hit earlier in the week.
(Editing by Catherine Evans)
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