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 European markets opened on the front foot again, looking for their
10th straight week of gains after last week's bumper set of easing
measures from the European Central Bank. .EU
Asian stocks earlier touched their highest levels in nearly three
years while Wall Street notched another record close on Friday
following bright U.S. jobs data.
MSCI's All-World share index .MIWD00000PUS, which encompasses 45
countries and is generally seen as benchmark of global stocks, was
up 0.15 percent at 427.11 points, just below its 2007 pre-financial
crisis peak of 428.63 points.
"We got more confirmation last week (from the ECB) that policy is
going to remain very loose for a long time," said Peter Sullivan,
HSBC's head of equity strategy in Europe.
"In the U.S. it's clear that earnings are coming back pretty
strongly and there are even signs of life now in Europe... So you
put that together and it's certainly more likely that equities rise
rather than fall from here."
Trading was thinner than usual due to public holidays in a handful
of countries including Germany and France, but the strong appetite
for risk in the region was hard to miss.
Spanish and Italian bond yields ES10YT=TWEB IT10YT=TWEB, a proxy for
what their governments pay to borrow on financial markets, were at
all-time lows with Spain enjoying lower yields than the United
States. US10YT=RR.
EMERGING DEMAND
Emerging markets were also performing strongly with stocks .MSCIEF
on the cusp of a 1-year high and a number of key currencies on the
rise.
The South Korean won KRW=KFTC touched a near six-year peak although
intervention by the foreign exchange authorities capped its upside,
while Malaysia's ringgit MYR=MY hit a near seven-month high. EMRG/FRX
Among major currencies, the dollar .DXY continued to benefit from
rising U.S. Treasury yields, after U.S. jobs data on Friday showed
employment back at its pre-recession level. (Full Story)
Weekend trade data from China also supported the view of a
recovering global economy, with exports gaining steam last month.
But the same data also contained some cause for concern, as a
surprising drop in imports could herald weaker domestic demand.
(Full Story)
[to top of second column] |
China's yuan rose after the People's Bank of China unexpectedly
fixed its daily midpoint higher against the dollar for the second
straight session, which in turn also gave a lift to other Asian
currencies. (Full Story)
RISING U.S. YIELDS HELP DOLLAR
The yield on benchmark 10-year Treasuries US10YT=RR stood at 2.6076
percent, up from Friday's U.S. close of 2.597 percent and well above
11-month lows plumbed last month.
"The yield on 10-year U.S. Treasuries may need to sustain a move
back above (the) 2.6 percent area to increase the likelihood of the
greenback move through the 102.80 level against the yen," Marc
Chandler, global head of currency strategy at Brown Brothers
Harriman, said in a note to clients.
For now, the dollar had to be content with a slight gain on the day
to buy 102.44 yen JPY=, getting some help early in the Asian session
from Japanese current account data which saw a lower-than-expected
surplus in April.
In commodities, U.S. crude CLc1 and Brent oil LCOc1 gained about 0.3
and 0.2 percent to $103.02 and $108.83 a barrel respectively,
underpinned by the solid jobs report that in theory should translate
to higher oil demand.
Spot gold XAU= was steady on the day at $1,252.95 an ounce, while
Shanghai copper fell to its lowest in nearly a month and London
copper also dropped, unsettled by concern that a probe into metals
storage at China's third-largest port could squeeze financing and
buying in metals.
((Additional reporting by Lisa Twaronite; Editing by John
Stonestreet); marc.jones@thomsonreuters.com)(+44)(0)(207 542
9033)(Reuters)
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