Global shares edge up and the dollar sizzles after record-breaking US retail sales, while the pound rises after UK inflation shock

• US stock futures edged up, driven by optimism over record retail sales data the previous day.
• UK data showed inflation hit a 10-year high in October as household energy bills soared, giving the pound a lift.

Global stocks rose Wednesday, spurred on by data showing US consumer spending hit a record high last month, while surprise UK inflation figures bolstered the case for the Bank of England to raise interest rates.

S&P 500, Dow Jones and Nasdaq 100 futures edged up, trading around 0.1-0.3% higher on the day. The benchmark indices closed higher Tuesday, helped by growth stocks and by technology shares in particular. The gains came after retail sales data highlighted the resilience of the US economy in October, even in the face of red-hot inflation.

Retail sales rose 1.7% last month to a new record high of $638.2 billion, from an upwardly revised $628 billion in September, Census Bureau data showed Tuesday. That beat the median forecast for a 1.1% jump from economists surveyed by Bloomberg.

"So much for soft consumer confidence signalling slower growth; what people do is much more important than what they say," Pantheon Economics chief economist Ian Shepherdson said.

"With a net revision of +0.4% on top of the consensus-beating October prints, this is a very strong report. We saw some upside risk to consensus, but this is better than we dared to hope, and it gets Q4 consumption off to a very strong start," he added.

The dollar flew to a fresh 16-month high against a basket of major currencies, egged on by growing anticipation over the timing of the Federal Reserve's first rate rise.

But it eased a touch against the pound, after data showed British inflation hit a 10-year high in October, driven by soaring household energy prices.

Consumer prices rose by 4.2% year-on-year in October, marking a pickup from September's 3.1% increase and well above expectations for a reading of 3.9%, according to Reuters.

The reading boosts the case for the BoE to hike interest rates for the first time in over four years. It held off on a rise at its last policy meeting, despite having sounded the alarm on growing price pressures.

"Today's data is a huge embarrassment for the Bank of England, whose procrastination over a modest 0.15% rate rise earlier this month now makes it odds on that all the pre-Christmas headlines will be of the 'Bank of England steals Christmas' variety, if they do bite the bullet and belatedly nudge rates higher," CMC Markets chief strategist Michael Hewson said.

Sterling rose 0.1% against the dollar, the euro and the yen, while two-year gilt yields hovered near two-week highs around 0.61%.

In equities, London's FTSE 100 fell 0.3%. That made it one of the worst-performing indices in Europe, compared with modest 0.1% gains in Frankfurt's DAX and the broader Stoxx 600.

In Asia, Chinese blue chips closed higher, with the Shanghai Composite up 0.4% and the Shenzen/Shanghai index gaining 0.6%. Tokyo's Nikkei meanwhile lost 0.4%, and South Korea's KOSPI dropped 1.1%.

Cryptocurrencies came under pressure for a second day. Bitcoin briefly dipped below $59,000, while ether veered toward $4,000. Both coins have hit record highs this month, buoyed by the launch of exchange-traded funds and investor excitement about the rise of the metaverse — a digital realm powered by play-to-earn cryptocurrencies and non-fungible tokens.

"Bitcoin and ethereum seem poised to finish the year as one of the top performing assets, but if we see Wall Street grow nervous over a policy mistake by the Fed, cryptos would get hammered," OANDA strategist Ed Moya said.

"Bitcoin's longer-term outlook is still much higher, but the short-term outlook is cloudy at best."