Bond yields in the US and Europe were poised for big weekly gains, weighing on major equity markets, while oil prices extended their rebound into a seventh session but were still set to post their worst first half since 1998.
The dollar was headed for its worst quarter in seven years against a basket of currencies.
Expectations for stronger economic data in Europe and rate tightening at central banks around the globe has knocked the greenback from its perch, pushing it 4.7 per cent lower for the April-June quarter, the worst performance since the third quarter of 2010.
Against the euro, the dollar has sunk more than seven per cent for the quarter and is on pace to drop more than two per cent this week.
The euro shot to one-year highs after Tuesday’s speech by European Central Bank president Mario Draghi bolstered expectations that a reduction in stimulus measures would be signalled soon.
The S&P 500 and the Dow Jones Industrial Average were higher in late morning trading, while the Nasdaq was little changed as a recovery in tech stocks sputtered.
Nike rose by as much as eight per cent after the world’s largest footwear maker said it would launch a pilot programme with Amazon.com. US consumer spending data for May also showed steady economic growth.
The Dow Jones Industrial Average rose 61.54 points, or 0.29 per cent, to 21,348.57, the S&P 500 gained 4.76 points, or 0.20 per cent, to 2,424.46 and the Nasdaq Composite added 5.88 points, or 0.1 per cent, to 6,150.23.
US Treasury yields rose after US inflation data was largely in line with expectations and seen as unlikely to delay the Federal Reserve’s expected interest rate hike path.
Yields on benchmark 10-year notes touched their highest since May 17 in earlier trading.
Money markets are pricing in around an 80-per cent chance that the ECB will hike rates over the next year.
That’s up from just 20 per cent earlier this month.
The spectre of reduced stimulus from central bank policy makers also has weighed on European stocks. The pan-European STOXX 600 fell 0.2 per cent yesterday and is headed for its biggest monthly loss in a year.
MSCI’s index of Asia-Pacific shares outside Japan fell 0.7 per cent, after hitting a two-year high on Thursday. It is up 5.3 per cent for the quarter and has risen 18.3 per cent this year.
In commodities, US crude added 0.75 per cent to $45.28 a barrel in its seventh straight session of gains, bringing its weekly increase to over five per cent.
Global benchmark Brent crude gained 0.45 per cent to $47.63 a barrel, poised for a nearly 10 percent rise this quarter.