US stocks showed modest declines yesterday while the dollar pulled back from earlier gains in the wake of the release of minutes from the Federal Reserve's policy meeting last month.
At the US central bank's latest meeting, policymakers expressed concern that raising interest rates too soon could stall the US economic recovery and debated the impact that low inflation measures were having on the Fed's confidence in proceeding with raising rates.
US equities stayed slightly lower while the dollar retreated to be flat against a basket of major currencies as the minutes created uncertainty over the timing of any rate hike.
The yield on benchmark 10-year US Treasury notes retreated to a session low of 2.045 per cent.
“A rate hike is still possible but it's not necessarily a sure thing,” said Gary Thayer, head of global macro strategy at Wells Fargo Investment Institute in St Louis.
“There is nothing definitive here, just a little more of the open-ended possibility that they are not necessarily going to be quick to move.”
In Europe, stocks marched higher to close at multi-year highs as investors brushed off uncertainty over Greece's negotiations with its creditors.
The Greek government said it will submit a request to extend a “loan agreement” for up to six months on Thursday but Germany said no such deal is on the table and Greece must stick to the terms of its bailout.
The European Central Bank agreed to raise emergency funding available to Greek banks to €68.3 billion, a slight increase on the previous limit, a person familiar with the ECB talks said.
Producer price data for January indicated US inflation remained subdued, which could boost the argument against a rate hike by the Fed, while other economic data pointed to a slowly accelerating US economy.
MSCI's all-country world stock index gained 0.2 per cent, while 10-year Treasuries were up 28/32 in price to yield 2.0469 per cent after touching a high of 2.164 per cent.
The Dow Jones industrial average fell 49.48 points, or 0.27 per cent, to 17,998.1, the S&P 500 lost 5.09 points, or 0.24 per cent, to 2,095.25 and the Nasdaq Composite dropped 5.06 points, or 0.1 per cent, to 4,894.20.
The FTSEuroFirst 300 index of leading European shares rose 0.7 per cent to a fresh seven-year high of 1,515.90.
Greek stocks recovered some of the week's losses to finish 1.1 per cent higher.Brent crude oil was down 3.49 per cent at $60.38 a barrel and WTI crude was down 2.9 per cent to $51.99.