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GLOBAL MARKETS-US equity futures moderate increases due to more limited inflation outlook

By Carolyn Cohn

LONDON, Apr 9 (Reuters) – US equity futures stabilized on Friday before the open due to a moderation in inflationary expectations, after the S&P 500 index hit a record the previous day, while world stock markets marked historic highs.

* Federal Reserve Chairman Jerome Powell pointed out at an International Monetary Fund event that the central bank was nowhere close to reducing support for the US economy, saying that while the economic reopening could result in prices higher temporarily, these will not constitute inflation.

* The comments followed data on Thursday showing an unexpected increase in the number of Americans filing new claims for unemployment benefits.

* S&P 500 futures were flat, while Nasdaq futures were down 0.2%.

* “As long as monetary stimulus keeps flowing, as long as fiscal policy is expansionary, any bump in equities will likely only be met later by increased investor demand,” said Giles Coghlan, analyst at HYCM.

* Investors have pumped more money into stocks in the past five months than in about 12 years, BofA’s weekly asset flow figures reported on Friday.

* The MSCI Global Stock Index was trading flat after hitting an all-time high in the Asian session. The benchmark has gained 1.6% this week.

* London Stock Exchange’s FTSE 100 rose to its highest level in over a year, bringing its cumulative earnings for the week to nearly 3%, helped by the advancement of the UK’s COVID-19 vaccination campaign United.

* European stocks were stable but were on track for their longest weekly winning streak since November 2019, as hopes for a rapid recovery in economic growth outweighed doubts about the COVID-19 vaccination schedule in Europe. * Euro zone authorities should only gradually withdraw their monetary and fiscal stimulus, European Central Bank Vice President Luis de Guindos said on Friday.

* Yields on 10-year US Treasuries were trading near Thursday’s two-week high of about 1.6%. At the end of March, returns rose to their highest level since January 2020 of 1,776%, due to fears of accelerating inflation in the United States.

* Deutsche Bank analysts said Powell’s comments “offered new reassurance to investors who had started to anticipate anticipated interest rate hikes in recent weeks following very strong economic data.”

* In the foreign exchange market, the dollar index added 0.2% and was preparing to close the worst week of the year, driven by the recent fall in Treasury bond yields. The euro was down 0.2% against the dollar.

(Additional reporting by Dhara Ranasinghe in London, Kevin Buckland in Tokyo and Chibuike Oguh in New York. Edited in Spanish by Marion Giraldo)

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