In This Article:
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Oil headed for fourth weekly decline
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Dollar steady, bitcoin eases
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Nikkei rises 0.9% to highest in 1-1/2 years
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U.S. stock index futures up ahead of Wall Street open
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U.S. data adds to confidence of Fed pausing, flags slowdown risk
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Banking fears linger after fall in PacWest deposits
By Huw Jones
LONDON, May 12 (Reuters) - Tepid Chinese economic data, haggling over U.S. government finances and uncertainty over interest rates left investors on edge and stocks stuck in a range on Friday.
Oil prices were headed for their fourth weekly decline, as renewed economic concerns in the United States and China revived anxieties about fuel demand.
The dollar was steady around a one week peak as investors bet that overnight data showing a slowing U.S. economy would prompt the U.S. Federal Reserve to pause on rate hikes.
On a brighter note, Britain's economy grew in the first three months of the year - instead of recession that was being forecast in late 2022 - but recovery remains fragile.
The MSCI All Country stock index was flat and little changed for the week. In Europe, the STOXX index of 600 companies edged up 0.4%, putting it slightly firmer for the week as Richemont shares hit a record high on news of strong demand in Asia Pacific.
"It feels markets are uncertain over whether we are going into a sustained or temporary economic slowdown, so we are stuck in a bit of a twilight zone," said Mike Hewson, chief markets strategist at CMC Markets.
A generally positive earnings season is drawing to a close and the next batch of major central bank rate-setting meetings are a few weeks away, leaving investors searching for reasons to break out of ranges in stocks, oil, currencies and bonds, analysts said.
Nasdaq futures and S&P 500 futures were slightly firmer after U.S. shares fell on Thursday on news that PacWest saw a drop in deposits, reviving worries over regional U.S. banks.
Shares of U.S. big banks were also lower after the U.S. Federal Deposit Insurance Corporation (FDIC) said big lenders would bear the cost of replenishing its deposit insurance fund caused by recent bank failures.
"We have had an aggressively sideways moving market and people are looking for something to give it direction," said Mark Tinker, chief investment officer at Toscafund asset management in Hong Kong.
A meeting between U.S. President Joe Biden and top lawmakers that had been scheduled for Friday has been postponed to early next week, with the IMF warning that a U.S. default would have "serious repercussions" for the U.S. economy.