Interest rate expectations and worries about oil prices retained their grip on world financial markets today as investors sought the best position for a potentially rocky ride.
European stocks climbed as oil eased on the day. Demand for bonds rose following some weak US economic data. The dollar hit multi-week lows against major currencies amid speculation that a high cost for oil could delay US interest rate hikes.
Weaker-than-expected US housing and durable goods reports yesterday triggered some concerns that expected Fed tightening could be muted, although expectations are still for a June rise.
Similarly, although rising oil prices would push up inflation, they could slow world growth and make it less likely that central banks will move rapidly from the current era of unusually low interest rate levels.
US light crude futures were down 24 cents but still above the $40 a barrel at $40.46. London Brent shed 18 cents to $36.90 a barrel, after closing 36 cents lower yesterday.