LONDON/HONG KONG, June 15 (Reuters) - World stocks hit yet another record high on Tuesday, with European stocks poised for their longest winning streak since 2019 as investors bet likely “transitory” inflation pressures will stay the U.S. Federal Reserve’s hand from signalling a shift in policy settings. A majority of investors surveyed by BofA said inflation was transitory, a marked change from March, when worries about more sustained price rises had sent U.S. 10-year Treasury yields surging to nearly 1.8%. With the yield now pinned below 1.5%, BofA expects the Fed to signal a dial back in stimulus by September. Abating worries about inflation helped U.S. and European shares scale new highs, with the pan-regional STOXX 600 rising 0.4%, its eighth straight day of gains. U.S. stock futures were up 0.1%. “Several factors that have pushed up inflation are likely to fade in the coming months,” said Mark Haefele, chief investment officer at UBS Global Wealth. “We don’t expect inflation to prompt a premature tightening of monetary policy or to derail the equity rally,” Haefele added. The two-day Fed meeting starts on Tuesday, with a final statement published after the meeting closes on Wednesday. Traders around the world are looking for any hints about whether and when the Fed plans to taper its bond buying programme as the U.S. economy bounces back from the pandemic fallout. Nearly 60% of economists in a Reuters poll expect a taper announcement will come in the next quarter, despite a patchy recovery in the job market. “Whilst no immediate changes in monetary policy are anticipated, an increase in the share of FOMC members who think rates will need to increase in 2023 is expected,” analysts at ANZ wrote in a note to clients. “If three more members pencil in rate rises for 2023, that would tip the majority in favour of moving rates relatively soon,” they said. In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan trading flat. Japan’s Nikkei rose 1% and the Australian benchmark traded up 0.93%, but Chinese blue chips fell 1.1%. China’s markets were closed on Monday for a holiday, meaning this was their first response to a joint statement by the Group of Seven leaders that had scolded Beijing over a range of issues which China called a gross interference in the country’s internal affairs. STRONG DOLLAR In currency markets, the dollar held onto its gains against major currencies. The dollar index was at 90.414, not far off the top of its recent range. Retail sales and industrial production data due later on Tuesday could spark some modest dollar volatility, wrote analysts at CBA in a research note. In the face of the strong dollar, spot gold was down slightly at $1,862.21 per ounce. Benchmark 10-year yields were 1.4838%, little changed from Monday, when they rebounded from Friday’s three-month low. As for commodities, U.S. crude ticked up 0.38% to $71.15 a barrel. Brent crude rose to $73.15 per barrel as talks dragged on over the United States rejoining a nuclear agreement with Tehran suggesting any surge in supply from Iran is some time away. Even bitcoin was fairly quiet, fluctuating a little above $40,000. It rose on Sunday and Monday after Elon Musk said Tesla could resume accepting payment in the world’s largest cryptocurrency at some point in the future. Reporting by Thyagaraju Adinarayan in London and Alun John in Hong Kong; Editing by Ana Nicolaci da Costa, Lincoln Feast and Kim Coghill Our Standards: The Thomson Reuters Trust Principles.
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