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*Dollar steady ahead of Thursday’s US inflation data*Gold, copper buoyant*Crude oil reverses losses to move higher*U.S. big bank earnings on Friday awaitedBy Huw JonesLONDON, Jan 11 (Reuters) – 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 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.”We are waiting for the U.S. CPI data, and it’s very premature to suggest we could continue in this positive vein over the coming weeks,” Hewson said.In Europe, the 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.Story continues”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.The U.S. earnings season moves into higher gear on Friday with results from big banks, such as Bank of America, JPMorgan Chase, Wells Fargo and Citigroup to offer clues on the economic outlook.CPI WATCHInvestor attention is squarely on the U.S. consumer price data on Thursday. The figures are expected to show December’s headline annual inflation at 6.5%, down from 7.1% in November.Thursday’s data will be crucial in determining what the Fed is likely to do with interest rates in its next meeting at the start of February.Fed Chair Jerome Powell, in a speech on Tuesday, refrained from commenting on rate policy but said the Fed’s independence was essential for it to battle inflation, leading U.S. stocks to end higher.”With some expectations that Powell would likely push back on easing financial conditions, equity markets celebrated the lack of any clear guidance on policy direction,” Saxo strategists said.ING bank said business surveys point to a slowing U.S. economy and, if inflation allows, the Fed will be in a position to ease policy later this year.Fed Governor Michelle Bowman said on Tuesday the central bank would have to raise interest rates further to combat high inflation and that would likely lead to softer job market conditions.MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%, touching a six-month high, while Japan’s Nikkei gained 1%. Australia’s S&P/ASX 200 index rose 0.90%.Hong Kong’s Hang Seng index rose 0.5%, lifted by hopes of a strong economic rebound from the COVID-19 pandemic and discounted values of stocks.In the foreign exchange market, the Australian dollar was 0.3% higher after data showed the annual pace of inflation had increased to 7.3% in November.The dollar index, which measures its performance against six major currencies, was flat at 103.26, hovering close to a seven-month low.The Japanese yen was up 0.2% at 132.5 per dollar, while sterling was last trading at $1.2148, slightly weaker on the day.The yield on 10-year Treasury notes was lower at 3.563%, while the yield on the 30-year Treasury bond was down at 3.6907%.The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down at 4.217%.U.S. crude was up 0.65% at $75.64 per barrel and Brent gained 0.75% to $80.68.(Reporting by Huw Jones and Ankur Banerjee; Editing by Bradley Perrett, Himani Sarkar and Tomasz Janowski)

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