European shares hold near 15-month highs

London — European stocks held near 15-month highs and the dollar strengthened against other top global currencies on Thursday on the growing expectation that the US Federal Reserve will raise interest rates later in March.

On Wednesday,
Fed governor Lael Brainard became the latest central bank official to signal that an increase may be in the offing, saying an improving global economy and a solid US recovery meant it would be "appropriate soon" to raise rates.
Federal fund futures prices suggest markets see a 70% chance of a 25 basis point hike.
European shares dipped after Wednesday’s strong showing, gains on Asian bourses and new record highs on Wall Street.

Although higher interest rates would raise US companies’ costs, they are also being seen as a sign of confidence in the economy and, along with US President Donald Trump’s speech to Congress, were cited as factors behind Wall Street’s rise.
Fed chair Janet Yellen is due to speak on the economic outlook in Chicago on Friday.
The pan-European Stoxx 600 index fell 0.1% after adding 1.5% on Wednesday and hitting its highest since December 2015, as losses on consumer-related stocks outweigh gains in healthcare and miners.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, while Japan’s Nikkei closed up 0.9% after hitting a 14-month high as a weaker yen helped exporters.
The dollar index, which measures the greenback against a basket of six major currencies, hit a seven-week high.

The euro fell 0.1% to $1.0535, the yen fell 0.5% to ¥114.26 against the dollar and sterling was flat at $1.2290, having earlier touched a six-week low around $1.2260.
The prospect of higher rates and a potential $1-trillion boost to US infrastructure sought by Trump pushed US treasury bond yields higher on Wednesday, but they pulled back from those highs on Thursday.
Rate-sensitive two-year yields edged up to 1.292%, off Wednesday’s peak of 1.308%, its highest since 2009.
German 10-year yields pulled back from the day’s highs after data showing eurozone inflation hit the European Central Bank’s (ECB’s) 2% target in February, as expected.
ING’s global head of debt and rates strategy Padhraic Garvey said before the release of the data that such a reading could extend the bearish momentum in bonds.

Oil prices fell for a third consecutive day after data showed a record build-up in US crude inventories. Brent crude fell 11c to $56.25 a barrel.
The stronger dollar weighed on metal prices, which were, however, buoyed by signs of growing demand. Chinese factory activity expanded faster than expected in February, purchasing manager data showed on Wednesday.
Copper, a key Chinese import, fell 0.3% to $5,995/tonne.
Gold fell 0.3% to $1,245/oz.
Reuters