Equities have performed their best since March this week

A rally in global stocks paused on Friday, though still on track for the best week since March, as earnings season in Europe and the US started to swing into gear.

The Stoxx Europe 600 index was little changed at the open. Luxury-goods maker Burberry Group Plc slipped after reporting slowing sales growth in the Americas and a smaller-than-expected rebound in China. Swiss money manager Partners Group Holding AG gained more than 3% after assets under management rose in the first half.

US equity futures fluctuated after tech megacaps bolstered the S&P 500 to above 4,500 on Thursday. The reporting season also kicks off in the US today with lenders JPMorgan Chase & Co., Wells Fargo and Citigroup Inc. A gauge of the dollar was steady, on track for its worst week since November. Treasury yields ticked higher.

A gauge of global equities has rallied more than 3% since Monday as “disinflation” and “soft landing” became the buzzwords across trading desks, with investors unwinding bets on Federal Reserve tightening after soft US inflation data.

“The market has been partying like it’s 1999 this week,” said Jim Reid, a strategist at Deutsche Bank AG. “It’s hard to stand in the way of that narrative at the moment regardless of what eventually happens.”

Most stock indexes advanced in Asia. Stocks fluctuated in Japan as the yen headed for a seven-day winning streak, which would mark its best performance since 2018.

The offshore yuan ticked higher. China has ample foreign exchange reserves and will “resolutely” prevent wild swings in the yuan exchange rate, People’s Bank of China Deputy Governor Liu Guoqiang said at a briefing Friday. The currency’s short-term movement cannot be predicted accurately, but it hasn’t deviated from its fundamentals, Liu added.

The producer price index for final demand rose 0.1% in June from a year earlier, the smallest advance since 2020. The figures came just a day after data showed consumer prices increased at the slowest pace since 2021.

“The Fed has already won the battle against inflation,” Raffaele Bertoni, head of debt capital markets at Gulf Investment Corp., said on Bloomberg Television. “If they want to be serious in maintaining inflation under control, the focus should be more on the reduction of the balance sheet or the quantitative tightening rather than increasing rates further.”

Fed Bank of San Francisco President Mary Daly, however, told CNBC Thursday that it’s too soon for policymakers to say they have done enough to return US inflation to their target. Fed Governor Christopher Waller also said he expects the US central bank will need to raise rates twice more this year to bring inflation down to its target.

In commodities, oil headed for a third weekly gain as supply disruptions in Africa and a reduction in shipments from Russia tightened the market. Gold was set for the best week since April.

Key events this week:

• US University of Michigan consumer sentiment, Friday
• US banks kick off earnings, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 was little changed as of 8:26 a.m. London time
• S&P 500 futures were little changed
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average fell 0.2%
• The MSCI Asia Pacific Index rose 0.4%
• The MSCI Emerging Markets Index rose 0.7%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.1% to $1.1210
• The Japanese yen fell 0.3% to 138.42 per dollar
• The offshore yuan rose 0.1% to 7.1423 per dollar
• The British pound fell 0.2% to $1.3105

Cryptocurrencies

• Bitcoin fell 0.3% to $31,289.55
• Ether rose 0.9% to $2,003.35

Bonds

• The yield on 10-year Treasuries advanced three basis points to 3.80%
• Germany’s 10-year yield advanced two basis points to 2.51%
• Britain’s 10-year yield advanced three basis points to 4.45%

Commodities

• Brent crude fell 0.4% to $81.05 a barrel
• Spot gold fell 0.2% to $1,955.66 an ounce

This story was produced with the assistance of Bloomberg Automation. --With assistance from Yumi Teso.