Australia

Australian shares are set to jump higher as US stocks rallied after the latest data on retail and producer prices showed slow but steady growth. Investors bet on a strong US consumer and resilient labor market to keep the market positive.

ASX futures were up 88 points or 1.22% to 7283 as of 9:00am on Friday, pointing to a rise at the open.

US stocks rose broadly with the Dow Jones Industrial Average on track for its best day since August 7, as investors digested the latest data on retail sales and producer prices. Higher energy prices lifted producer prices and retail sales data, and weekly jobless claims remained at historically low levels.

Investors shrugged off rebounding inflation Thursday, scooping up stocks in a bet that a strong US consumer and resilient labor market will keep the market humming.
Thursday's slate of economic news was heavy: Consumers spent more than expected in August, suppliers faced rising prices, and the European Central Bank lifted interest rates to the highest level in its history.

Traders worried that stubborn inflation might spur the Federal Reserve to raise rates further were relieved to see fuel costs behind the latest pulse, since the central bank tends to ignore volatile gas prices. Stocks rose across the board.

The S&P 500 added 0.8%, with all 11 of its sectors finishing in the green. The tech-heavy Nasdaq Composite also rose 0.8%, and the Dow industrials gained 1%.

Norwegian Cruise Lines and Carnival were among the day's best performers, advancing 5.7% and 4.1% respectively to extend their gains this year. Rising fuel costs stand to hit profits at cruise operators, airlines and other transportation companies, but consumers are still traveling. Shares of online travel company Booking Holdings rose 2.6%.

In commodity markets, Brent crude oil rose by 1.98% to $US93.70 a barrel, Gold remained flat at $US1,910.48 and Iron ore rose by +1.6% to $US121.30 a tonne.

In local bond markets, the yield on Australian 2 Year government bonds remained flat at 3.84% while the 10 Year was down slightly at 4.10%. Overseas, the yield on 2 Year US Treasury notes edged higher to 5.01% and the yield on the 10 Year US Treasury notes advancing to 4.29%.

The Australian dollar rose to 64.34 US cents from its previous close of 64.20 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged higher to 99.36.

Asia

Chinese shares ended mixed ahead of the release of key economic indicators for August. Retail sales, industrial output and fixed assets investment data due Friday are likely to offer more clues on whether Beijing's stimulus measures have been effective in boosting consumer and property demand. Automakers and consumption stocks declined. BYD shed 3.15% and China Tourism Group Duty Free dropped 1.9%. Among gainers were energy and financial stocks. PetroChina rose 0.85% and ICBC gained 1.3%. The benchmark Shanghai Composite Index closed 0.1% higher at 3126.55. The Shenzhen Composite Index fell 0.6% and the tech-heavy ChiNext Price Index declined 0.8%.

Hong Kong shares closed slightly higher, led by gains in energy and communication stocks. The benchmark Hang Seng Index ended 0.2% higher at 18047.92 and the Hang Seng Tech Index closed up 0.4%. Investors were parsing US inflation data released overnight, which some analysts view as backing the case for a Fed rate hold, and looking toward key China economic indicators due tomorrow. Energy stocks gained amid recent strength in crude-oil prices, with PetroChina up 5.8%. Among telcos, China Unicom rose 3.6%. Health-services providers weighed on the market, with Hansoh Pharmaceutical losing 1.4%. One of the top decliners was property developer Country Garden Holdings, which lost 4.55%, continuing its run of volatility amid a spate of headlines about its debt restructuring efforts.

Japanese stocks ended higher, led by gains in real-estate, auto and electronics shares, as concerns eased about the Fed's further tightening. Mitsubishi Estate climbed 3.2%, Honda Motor advanced 3.5% and Lasertec gained 5.8%. The Nikkei Stock Average rose 1.4% to 33168.10. Investors are focusing on the European Central Bank's policy decision and US economic data due later in the day. The 10-year Japanese government bond yield was flat at 0.705%.

Indian shares rose slightly, tracking gains in regional markets amid hopes that the US Federal Reserve will pause its rate-hiking cycle at the coming policy meeting following August inflation data released overnight. Although headline inflation surprised on the upside, core inflation eased in line with market expectations, OCBC analysts say in a research note. Energy and metal stocks led gains. NMDC rose 5.6% and Hindalco Industries added 3.0%. Deep Industries increased 3.1% and Indian Oil climbed 1.8%. Among index constituents, Mahindra & Mahindra climbed 2.6%, while Asian Paints shed 1.1%. India's benchmark Sensex closed 0.1% higher at 67519.00.

Europe

European bank shares made some gains after the European Central Bank raised interest rates by a quarter of a percentage point. The ECB's hike, its 10th in a row, took the deposit rate to an all-time high of 4% as the bank continues to fight against inflation. Most European bank shares were up, with BNP Paribas, BBVA, Santander, Unicredit and Deutsche Bank among the biggest risers after the rate decision. BNP shares gained 2.4%, BBVA was up 1.7%, Deutsche Bank was up 1.8%, while Santander climbed 2.1%. Unicredit shares were up 1.5%. The Stoxx Europe 600 Banks index climbed 1.8%, having risen about 0.7% before the ECB's rate call.

European stocks rose sharply after the European Central Bank raised interest rates by 25 basis points but suggested that this should now mark the peak, barring a further unforeseen rise in inflation. The Stoxx Europe 600 index rose 1.2% to 459.42.

Germany's DAX climbed 0.97%, France's CAC 40 was up by 1.19%.

The FTSE 100 closed Thursday up 1.95% to reach its highest levels in six weeks, propelled by rallying commodity prices, said IG Group. "It seems that the ECB will now hold policy steady unless and until inflation surges again," wrote Chris Beauchamp, chief market analyst at IG Group. This "offers a crumb of comfort to eurozone equities" even as it "has dealt a major blow to the euro," he said. Oil and natural-gas prices enjoyed a solid afternoon, and Shell and BP added more than 20 points to the index, with Rio Tinto and Glencore following close behind, IG Group chief market analyst Chris Beauchamp said in a research note.

"Optimism around economic growth prospects for Asia has meant that Asia-focused banks HSBC and Standard Chartered have led the banking sector higher too, resulting in the best day for the FTSE 100 since mid-July," said Beauchamp. The euro fell to a three-month low of $1.0657, according to FactSet.

North America

US stocks rose broadly with the Dow Jones Industrial Average on track for its best day since August 7, as investors digested the latest data on retail sales and producer prices. Higher energy prices lifted producer prices and retail sales data, and weekly jobless claims remained at historically low levels.

Investors shrugged off rebounding inflation Thursday, scooping up stocks in a bet that a strong US consumer and resilient labor market will keep the market humming.

Thursday's slate of economic news was heavy: Consumers spent more than expected in August, suppliers faced rising prices, and the European Central Bank lifted interest rates to the highest level in its history.

Traders worried that stubborn inflation might spur the Federal Reserve to raise rates further were relieved to see fuel costs behind the latest pulse, since the central bank tends to ignore volatile gas prices. Stocks rose across the board.

The S&P 500 added 0.8%, with all 11 of its sectors finishing in the green. The tech-heavy Nasdaq Composite also rose 0.8%, and the Dow industrials gained 1%.

Norwegian Cruise Lines and Carnival were among the day's best performers, advancing 5.7% and 4.1% respectively to extend their gains this year. Rising fuel costs stand to hit profits at cruise operators, airlines and other transportation companies, but consumers are still traveling. Shares of online travel company Booking Holdings rose 2.6%.

"If consumers are employed and have money to spend, that should keep the economy away from deteriorating too much," said Randy Frederick, managing director of trading and derivatives at Schwab.

Shares of small-caps and energy companies, typically sensitive to the economic cycle, helped lift stocks Thursday. Marathon Oil climbed 2.9%, while the Russell 2000 index rose 1.4%.

Shares of British chip designer Arm Holdings closed at $63.59 after its initial public offering priced at $51 per share, showing some positives for the cool IPO market and the continuing hype surrounding AI. Electric-vehicle maker Tesla added 1.7% on the day.

Producer inflation and retail sales reports -- along with the consumer-price index the prior day -- showed gas prices are surging. Benchmark US oil futures traded above $90 a barrel for the first time since November. The last time oil was this expensive, crude prices were still descending from heights reached after Russia invaded Ukraine.

Traders are betting that the US central bank won't raise rates at next week's meeting, but still think one more quarter-percentage-point hike before the end of the year is possible. As consumer inflation data failed to shock and with the labor market still at historically tight levels, Wall Street's growing clarity around the path of monetary policy is supporting stocks, Frederick said.

"Interest-rate certainty is a huge deal for small-caps with a lot of debt," he said. "More certainty helps consumers and companies plan better -- that's a good market environment."

Bond yields moved higher as prices fell, responding to the hotter-than-expected economic data. Yields remain at some of their loftiest levels since the 2008 financial crisis, signaling that bond investors haven't sounded the all-clear yet. The 10-year yield finished at 4.289%.

"The bond market has spent most of the last two months worrying about persistent inflation and an economy that seems to be running hot, despite all of the Fed rate hikes," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. "The most recent economic data does more to reinforce those fears than it does to dispel them."