LONDON – World stocks steadied around the week’s lows with the mood dampened by inflation worries ahead of US consumer price data later on Wednesday, with economic recovery in many countries keeping oil prices near multi-year highs.

September US CPI is forecast to show a monthly gain of 0.3 percent, according to a Reuters poll. Minutes of the US Federal Reserve’s September policy meeting are also due later, while JPMorgan will be the first major bank to report at the unofficial start of the company earnings season.

“The markets are at a crossroads,” said Giles Coghlan, chief currency analyst at HYCM. “Are we are in a stagflationary environment – will we see low growth but high inflation? That’s the concern.”

The MSCI world equity index was flat after dropping in the previous three sessions. S&P futures fell 0.4 percent after the S&P 500 dropped 0.2 percent overnight on earnings jitters.

European stocks fell 0.4 percent and are nearly 5 percent below their August peak. UK stocks dropped 0.4 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan clawed back some ground, rising 0.3 percent after falling over 1 percent a day earlier, its worst daily performance in three weeks.

Positive trade figures from China, which showed export growth unexpectedly accelerated in September, provided some relief to those worried about a slowdown in the world’s second-largest economy.

The data helped Chinese blue chips jump 1.2 percent, despite continued weakness in real estate stocks.

Japan’s Nikkei shed 0.3 percent, as high energy prices and a weak yen mean trouble for a country that buys the bulk of its oil from overseas.

The dollar fell 0.2 percent against an index of currencies after hitting a one-year high in the previous session on rising expectations the Fed will announce a tapering of stimulus next month, with interest rate hikes following next year.

Three US Federal Reserve policymakers on Tuesday said the US economy had healed enough for the central bank to begin to withdraw its crisis-era support.

The dollar steadied at 113.58 yen after hitting its highest in nearly three years against the Japanese currency on Tuesday. The euro was up 0.2 percent at $1.1551.

Ten-year US Treasury yields, meanwhile, steadied at 1.5804 percent after hitting four-month highs on Tuesday.

Germany’s 10-year yield was unchanged at -0.10 percent after rising to -0.085 percent earlier, its highest since late May.

“There is pressure from the inflation story,” said Charles Diebel, head of fixed income at asset manager Mediolanum, pointing to increased expectations of UK rate hikes.

“People are worrying about the same happening elsewhere, they fear inflation will be so persistent central banks will be forced to respond.”

Oil prices lost some froth on the inflation concerns although surging prices for power generation fuel such as coal and natural gas limited losses.

Brent crude was steady at $83.40 a barrel, off Monday’s three-year high of $84.60, while US crude inched lower to $80.63, off Monday’s seven-year high of $82.18. [O/R]

Gold, used as a hedge against inflation, rose 0.3 percent to $1,765 an ounce.