[1/2] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 30, 2023. REUTERS/Brendan McDermid

  • Asian stock markets:
  • Traders all but certain Fed will pause hiking on Weds
  • European stocks gain, Dollar near three-week low
  • Sterling touches fresh one-month high, UK bonds stabilise

June 14 (Reuters) - Global shares edged higher and the dollar fell to a four-week low on Wednesday after the latest reading of U.S. inflation cemented bets that the U.S. Federal Reserve will not hike interest rates later in the session.

U.S. producer prices fell more than expected in May and the annual increase in producer inflation was the smallest in nearly 2-1/2 years, according to Labor Department data.

This was after the consumer price index (CPI) report on Tuesday showed prices barely rose in May, with just a 0.1% increase from the prior month.

The data appeared to support traders' views that the Fed is unlikely to hike rates later on Wednesday. They now see more than a 95% chance of the central bank staying put, according to CME Group's FedWatch Tool.

"Following yesterday's lower inflation data and today's improving numbers, markets are expecting the Fed to pause its rate hikes today," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 136.57 points, or 0.4%, to 34,075.55, the S&P 500 (.SPX) gained 12.64 points, or 0.29%, to 4,381.65 and the Nasdaq Composite (.IXIC) added 54.67 points, or 0.4%, to 13,627.99.

The pan-European STOXX 600 index (.STOXX) rose 0.40% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.46%, hitting its highest level since April 2022.

Wednesday's data also sent U.S. Treasury yields lower with benchmark 10-year notes down 5.5 bps to 3.784%, from 3.839% late on Tuesday. The 30-year bond was last down 4.4 bps to yield 3.8969%, from 3.941%. The 2-year note was last was down 7.4 bps to yield 4.6222%, from 4.696%.

And in currencies, the dollar index hit a four-week low and was last down 0.532%, with the euro up 0.53% to $1.0848. The yen strengthened 0.59% versus the greenback at 139.40 per dollar, while sterling was last trading at $1.2694, up 0.65%.

Oil prices rose after bullish oil demand forecasts from the International Energy Agency (IEA) and OPEC.

U.S. crude recently rose 0.42% to $69.71 per barrel and Brent was at $74.66, up 0.5% on the day.

Reporting by Sinéad Carew, Yoruk Bahceli and Stella Qiu; Editing by Jacqueline Wong, Sharon Singleton, Chizu Nomiyama, Richard Chang and Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

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