Berliner Boersenzeitung - Stocks struggle ahead of key US inflation data

Wall Street retreated at the start of trading while Paris and Frankfurt were down in afternoon deals, but London's FTSE 100 edged higher.

Among individual stocks, investors will monitor the expected unveiling of Apple's latest iPhones and other products from the world's most valuable company.

"With the US dollar also rebounding across the board, things could start to turn more volatile for equities again, especially if Apple fails to wow investors," said Fawad Razaqzada, market analyst at City Index and Forex.com.

But attention is already geared towards Wednesday's update on consumer prices in the world's biggest economy.

A reading that points to inflation remaining hot could prompt the Federal Reserve to continue to hike US interest rates this year, confounding analyst expectations of a freeze.

Investors fear that the rising borrowing costs will tip the US economy into recession.

While the Fed meets next week, the European Central Bank will decide Thursday whether to pause or continue its own rate-hike campaign after 10 straight increases.

Further gains to oil prices increased concerns about inflation staying above target for longer.

"A higher oil price is a worry, given how the talk this summer has been about easing inflationary pressures," noted Russ Mould, investment director at AJ Bell.

"Higher energy costs could derail that trend and cause new problems for consumers and businesses. However, investors don't appear to recognise that risk given trends seen on global markets in recent sessions."

A group of leading economists at some of the world's biggest banks said they did not expect the Fed to hike again in 2023 and would begin slashing borrowing costs in the new year, while they also predicted the United States would avoid a recession.

"Given both demonstrated and anticipated progress on inflation, the majority of the committee members believe the Fed's tightening cycle has run its course," said Simona Mocuta, chair of the 14-member American Bankers Association's Economic Advisory Committee.

The ABA includes economists from banking titans such as JPMorgan Chase, Morgan Stanley and Wells Fargo.

The dollar gained against other major currencies as higher rates make the greenback more attractive for investors looking for higher returns.

In Asia, the Hong Kong stock exchange fell but property stocks rallied following a report that troubled Chinese developer Country Garden had been given the green light by creditors to extend payments on six yuan bonds by three years.

The firm won approval from creditors this month to extend a deadline for another key bond repayment to give it time to recover financially.

The latest report helped soothe concerns about China's troubled property sector, pushing the firm's shares up around two percent, having been in the red earlier in the day.

Rival China Evergrande, which is also struggling with massive debts, climbed more than six percent.

Country Garden said last week it had made multimillion-dollar interest payments on two outstanding loans, narrowly avoiding what would have been its first default.

However, China worries continue to dampen buying sentiment, even after small signs of improvement in the world's number-two economy, including a return to inflation and smaller-than-expected drop in exports and imports.

- Key figures around 1350 GMT -

New York - Dow: DOWN 0.2 percent at 34,594.95 points

London - FTSE 100: UP 0.5 percent at 7,532.80

Frankfurt - DAX: DOWN 0.4 percent at 15,735.25

Paris - CAC 40: DOWN 0.2 percent at 7,263.73

EURO STOXX 50: DOWN 0.2 percent at 4,247.88

Tokyo - Nikkei 225: UP 1.0 percent at 32,776.37 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 18,025.89 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,137.06 (close)

Dollar/yen: UP at 147.19 yen from 146.56 yen on Monday

Euro/dollar: DOWN at $1.0716 from $1.0752

Pound/dollar: DOWN at $1.2464 from $1.2511

Euro/pound: UP at 85.96 from 85.87 pence

Brent North Sea crude: UP 1.4 percent at $91.89 per barrel

West Texas Intermediate: UP 1.6 percent at $88.72 per barrel

burs-lth/giv

(B.Hartmann--BBZ)