|
 U.S. stock futures were up 0.3 percent, with shares having recouped
a lot of their falls in the previous session already. The global
rally in equities started on Wall Street in late trade on Wednesday,
with major indexes ending roughly flat after falling in early trade.
The perkier mood in riskier assets soured investor appetite for
safe-haven government bonds, which had benefited from a sharp
sell-off in equity and commodity markets prompted by the devaluation
that saw the yuan slide around 4 percent.
The People's Bank of China (PBOC) said there was no basis for more
yuan depreciation in light of strong economic fundamentals, even
though the yuan dropped for the third straight day.
The PBOC set its guidance rate at 6.4010 per dollar prior to the
market opening, weaker than the previous fix of 6.3306. The gap
between the guidance rate and the traded spot market rate narrowed
sharply as banking sources said the PBOC had stepped up intervention
in a bid to stabilize prices.
Still, traders remained cautious. Sources told Reuters some powerful
voices in the government were pushing for an even deeper devaluation
to help China's struggling exporters.
PBOC Vice-Governor Yi Gang dismissed such talk as groundless, but
some in the market still expected that China would let the yuan
slide further in the face of weakness in the economy.
"Investors have pounced on those reassurances from China to push the
markets back up a bit. They're taking the Chinese central bank at
its word, but I'm still taking those comments with a pinch of salt,"
said Hantec Markets' analyst Richard Perry.
The pan-European FTSEurofirst index of leading 300 blue-chips rose
1.7 percent to 1,543.23, having fallen as much as 4 percent this
week.
The MSCI's broadest index of Asia-Pacific shares outside Japan edged
up 0.3 percent.
U.S. FED FOCUS
The recovery in equities dimmed the allure of safe-haven government
debt, pushing up U.S. and European bond yields.
German 10-year bond yields were 3 basis points higher at 0.63
percent while benchmark U.S. 10-year yields were 4 bps up at 2.17
percent in European trade, following a lackluster auction on
Wednesday.
[to top of second column] |
The dollar, which had also suffered as investors pared back bets
that the U.S. Federal Reserve's long-awaited interest rate hike
would come as early as its Sept. 16-17 meeting, rebounded on
Thursday.
The dollar index was up 0.3 percent at 96.558 recoiling from a
one-month low of 95.926 hit on Wednesday with focus also on U.S.
retail sales data due at 1230 GMT for further hints on the Fed rate
outlook.
"The U.S. clearly needs to watch the global economy and China, but
ultimately, if we get a very strong release today, market
expectations for a September interest rate hike will probably bounce
right back," said Rabobank currency strategist Jane Foley.
Against the safe-haven yen, the dollar also rose 0.3 percent to
124.51, bouncing off a two-month high of 125.28 yen set on
Wednesday.
The euro edged down about 0.4 percent at $1.1114 after scaling a
one-month peak of $1.1215 on Wednesday, helped by the unwinding of
euro-funded carry trades in the yuan and other emerging market
currencies.
In commodities trading, spot gold was down about 0.7 percent at
$1,117.80 an ounce after logging its fifth straight session of
gains.
Crude oil futures extended gains made on lower U.S. crude
stockpiles, but remained not far from six-year lows plumbed this
week on fears that China's weaker currency would hit its imports.
U.S. crude was up about 0.3 percent at $43.43 a barrel, while Brent
rose back above $50 a barrel, adding about 1.2 percent to $50.23.
(Additional reporting by Sudip Kar-Gupta and Jemima Kelly in London;
Editing by Kevin Liffey and Raissa Kasolowsky)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
