Friday February 16, 2007 - 10:34:24 GMT
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Reuters - www.reuters.com
CORRECTED - GLOBAL MARKETS-U.S. housing, inflation are investor focus
Fri Feb 16, 2007 5:00 AM ET
(Corrects paragraph 10 to show Nikkei is up 10.95 percent on the year and not year-to-date.)
By Jeremy Gaunt, European Investment Correspondent
LONDON, Feb 16 (Reuters) - Investors looked ahead to U.S. reports on housing and producer prices on Friday for guidance on the state of the world's leading economy after a raft of soft data, while red-hot equities cooled a bit in both Europe and Asia.
The dollar nursed losses near a six-week low against the euro and ticked higher versus the yen. European bond prices were steady.
With the U.S. economy in full focus, investors were waiting for U.S. producer price inflation and housing data at 1330 GMT, as well as the University of Michigan February consumer sentiment survey at 1500 GMT.
Economists in a Reuters survey projected a median 0.5 percent fall in the U.S. producer price index compared with a 0.9 percent rise in December. Housing starts were seen slightly lower and consumer sentiment up a bit.
The degree to which the U.S. economy is cooling has been the key focus for many investors over the past few months, with varying views on how much a slowdown will effect other countries and markets.
U.S. Federal Reserve Chairman Ben Bernanke said earlier this week that U.S. growth may be slowing and inflation easing -- comments seen by the market as increasing the chances of U.S. rate cuts later this year.
"Two of the main drivers of U.S. monetary policy at present, the housing market and core inflation, will be under scrutiny today," Lloyds TSB said in a note.
Equity prices were generally lower. The pan-European FTSEurofirst 300 index <.FTEU3> was 0.1 percent weaker after hitting a six-year high in the previous session.
Spanish bank BBVA tumbled more than 3 percent after it agreed to buy U.S. bank Compass Bancshares for $9.6 billion.
Earlier, Japan's Nikkei <.N225> average dipped 0.12 percent, snapping a five-session winning streak. It closed down 21.58 points at 17,875.65. On the week the Nikkei added 2.12 percent; on the year it has gained 10.95 percent.
The broader TOPIX <.TOPX> index fell 0.12 percent to 1,774.53.
The dollar traded near a six-week low against the euro and ticked higher versus the yen head of the U.S. data.
"We've seen a reasonably volatile week. Probably the market is looking for PPI to be relatively benign. The housing market continues to be at best flat. If that comes higher than expected it might encourage further consolidation in euro/dollar," said Jeremy Stretch, market strategist at Rabobank.
The euro was trading at $1.312 , down 0.15 percent on the day, after hitting a six-week high of $1.3172 on Thursday. The dollar was up 0.25 percent on the day at 119.48 yen having delved as low as 119.15 on Thursday.
European government bond prices were flat to slightly higher. Ten-year euro zone bond yields were at 4.038 percent.
"Assuming the (U.S.> data is not too rogue then we see some ongoing upwards bias.," one trader said.
Â© Reuters 2007. All rights reserved.
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