NEW YORK, March 19 ― Global stocks rose yesterday while Treasury yields crept higher ahead of this week's raft of central bank meetings that could end subzero interest rates in Japan and set a blueprint for US rate cuts this year.

MSCI's broadest index of stocks added 0.47 per cent by the close of trade in New York, helped in part by upbeat industrial output and retail sales data from China.

In the United States, the Dow Jones Industrial Average rose 0.2 per cent, the S&P 500 added 0.63 per cent, and the Nasdaq Composite jumped 0.82 per cent.

The US Federal Reserve is considered certain to keep rates at 5.25-5.5 per cent when it ends its policy meeting on Wednesday, and investors mostly expect the Fed to begin cutting rates by June or July.

“The market focus is very much on the start of rate cuts. Not that the Fed is expected to cut at this meeting, but any clues Chair (Jerome) Powell might offer for when the first rate cut could come,” said Chris Low, chief economist at FHN Financial.

Some analysts have warned of the possibility that the Fed might signal a higher-for-longer outlook on policy, given the stickiness of inflation at both consumer and producer levels.

“Recent US data indicate gradual steps towards increasing inflation risks,” Dana Malas, a strategist at SEB Bank, said in a note.

“That the road to 2 per cent would be straight is wishful thinking; setbacks are inevitable. Disinflationary forces are still stronger than inflationary pressures.”

The probability of a US rate cut as early as June has dropped to 56 per cent, from 75 per cent a week earlier, and the market has only 72 basis points of easing priced in for 2024 compared to more than 140 basis points a month ago.

This sent two-year Treasury yields up 0.9 basis points to yield 4.7319 per cent, after they climbed 24 basis points last week, while 10-year yields rose 2.8 basis points to 4.332 per cent.

The Fed is also expected this week to start talking about how it might slow the pace of its bond sales, perhaps halving it to US$30 billion (RM141.5 billion) a month.

Several other central banks including in Japan, Britain, Switzerland, Norway, Australia, Indonesia, Taiwan, Turkey, Brazil, and Mexico also meet this week and, while many are expected to hold steady, there is plenty of scope for surprises.

Japan on Tuesday could end the longest run of negative interest rates in history, after its companies decided on the biggest pay hikes in 33 years.

However, there is a chance the Bank of Japan might wait for its April meeting, when it will issue updated economic forecasts.

The Japanese yen weakened 0.10 per cent versus the greenback at 149.17, while the euro was down 0.17 per cent to US$1.0868.

Earlier in the day, Asian markets closed higher after Chinese data beat expectations.

Japan's Nikkei closed up 2.7 per cent, while Shanghai's blue chip index CSI300 finished up about 1 per cent.

Across the pond

European stocks gave up earlier gains and the pan-European STOXX 600 index lost 0.26 per cent by 1515 GMT.

The Bank of England meets on Thursday and is expected to keep rates at 5.25 per cent as wage growth cools, while markets see some chance the Swiss National Bank might ease this week.

The ascent in the dollar and yields has taken little shine off gold, which added 0.2 per cent at US$2,159.33 an ounce, having fallen 1 per cent last week and away from all-time highs.

Oil prices have had a better run after the International Energy Agency raised its view on 2024 oil demand, while the supply outlook was clouded by Ukrainian strikes on Russian oil refineries.

US crude rose 2.33 per cent to US$82.93 per barrel and Brent was at US$87.00, up 1.95 per cent on the day. ― Reuters