Wellington: The rally in global stocks extended into a third day amid optimism economic growth is strong enough to withstand higher US interest rates. Germany’s two-year note yield slid to an all-time low, while oil fluctuated after OPEC deferred a decision on production cuts.
European shares rose to a four-week high after US stock indexes advanced to records on Tuesday. German yields sank amid increased speculation the European Central Bank will ease policy at next month’s meeting, while Malaysia’s ringgit slumped for an 11th day after the central bank’s decision to leave interest rates unchanged failed to assuage concern over capital outflows. Oil swung between gains and losses after OPEC left unresolved how Iran and Iraq will participate in planned output cuts.
Equity traders are taking an optimistic stance before America’s Thanksgiving holiday on Thursday, sending the MSCI All-Country World Index toward its longest winning streak in two months. Developed-market shares and the dollar have been among the biggest winners since Donald Trump’s surprise election victory fueled speculation of more fiscal stimulus in the US, while government bonds and emerging markets have slumped. Traders will look for further confirmation of the Fed’s policy intentions when minutes from the central bank’s November meeting are released on Wednesday.
“Bulls have got control here and US equity and many other developed markets are going higher, at least in the short term,” Chris Weston, chief markets analyst in Melbourne at IG Ltd., said in an email. “The Fed has been guiding market participants to believe they always wanted a hike in December. They just needed a little more information before increasing rates and now they have more than enough information to convince them.”
Along with the Fed minutes, US data on durable goods orders, jobless claims, home prices and manufacturing are due Wednesday.
The Stoxx Europe 600 Index rose 0.2% at 8.31 am in London, while the UK’s FTSE 100 Index added 0.7% . UK Chancellor of the Exchequer Philip Hammond is scheduled to outline a series of measures to help “ordinary working-class families” and stress that a stable economy, fiscal discipline and better productivity are the best ways to raise living standards in his Autumn Statement to Parliament on Wednesday.
The MSCI Asia Pacific excluding Japan Index advanced 0.7 % , building on last session’s 1.1% increase. Australia’s S&P/ASX 200 Index added 1.3% and the Hang Seng China Enterprises Index climbed 0.2% .
Futures on the S&P 500 Index rose 0.1% after all four major US stock benchmarks climbed to records on Tuesday.Bloomberg