Global stocks edged higher on Wednesday, underpinned by hopes that inflation was being tamed enough to ease the pace of interest rate hikes and reduce the chances of deep recession.
As investors waited for Thursday's U.S. consumer price index (CPI), the dollar was steady, while gold scaled an eight-month peak on bets the U.S. inflation data will show a slowdown in price increases.
Crude oil prices shrugged off early losses to move higher, while copper prices held near 6-1/2 month highs on optimism over economic reopening of top consumer China.
Stocks continued to build up on their gains for 2023 as investors hope there will be no repeat of last year's rout and that any economic recession will be shallow or even avoided.
The MSCI all country stock index (.MIWD00000PUS) was up 0.11%, adding to the year's gain of nearly 3% after a near 20% slide in 2022.
"We are having a warmer winter, recession risks are diminishing, and consequently there is a perception that things might not be as bad, and that is what is driving equity markets higher, particularly in Europe," said Mike Hewson, chief markets analyst at CMC Markets.
In Europe, the STOXX (.STOXX) index of 600 companies was up 0.44%, back at levels seen around mid-2022.
Mark Tinker, chief investment officer at Toscafund asset management in Hong Kong, said that after the bear market of 2022, investors were tussling with whether there will be further downside this year before markets stabilise.
"What we have now got is the division of opinion - have we got a second leg coming?" Tinker said, adding this was leading investors to put small bets in markets, helping to set the more positive tone.
"There is no real dominant conviction to it yet. Right now people are tilting a bit away from there's going to be a second leg," Tinker added.
