Hong Kong/London: Stocks, the pound and commodities all gained for the first time since Britain’s shock vote to leave the European Union (EU) amid speculation policy makers will take steps to limit any economic fallout.

The Stoxx Europe 600 Index and sterling both rebounded after tumbling 11% in the last two trading sessions. A gauge of the dollar’s strength snapped its steepest rally since 2011 as futures indicated that the next move in US interest rates is now more likely to be a cut. The Bloomberg Commodity Index climbed from an almost four-week low as oil rose with industrial metals. Spanish and Italian bonds gained.

About $3.6 trillion has been wiped off the value of global equities since Thursday on concern Britain’s vote to secede from the EU will disrupt the global economic recovery. Investors are now looking to central banks for support, with Fed funds futures indicating there is higher probability the Federal Reserve will cut rather than raise interest rates this year. Before the referendum results there were zero prospects for a reduction, and a 50% probability of an increase by December.

“Stocks are rebounding on the expectation that there will be a coordinated intervention by central banks," said John Plassard, a senior equity-sales trader in Geneva at Mirabaud Securities, which oversees 34 billion Swiss francs ($35 billion) in assets. “What central banks can do is put confidence back in the market by telling everyone that they are here and ready to act. If we don’t get that sort of support, we’ll see further declines.

Stocks

European shares rebounded after the biggest two-day slump since 2008, with the Stoxx 600 jumping 3% at 9:09 am in New York. Trading volumes were almost twice the 30-day average. The UK’s FTSE 100 also advanced 2.8%, recovering some of its 5.6% slide over the previous two days.

Italian banks including Mediobanca SpA were among the biggest gainers after the European Commission said it was in touch with Italian authorities over possible support measures following the recent selloff. British lenders Barclays Plc and Royal Bank of Scotland Group Plc rose at least 3.5% after losing more than 30% in the previous two days.

EU leaders will gather in Brussels on Tuesday for the start of a two-day European Council summit to discuss Britain’s decision to leave the bloc. US data are forecast to show that consumer confidence held close to a six-month low this month, while China’s central bank Governor Zhou Xiaochuan is due to speak at a forum being hosted by the European Central Bank. Bank of England governor Mark Carney is scheduled to chair a meeting of financial stability officials.

Nestle SA advanced 3.6% after naming Ulf Mark Schneider as successor to chief executive officer Paul Bulcke, handing the reins of the world’s biggest food company to an outsider for the first time in nearly a century. G4S Plc jumped 9.2% after Credit Suisse Group AG upgraded the company’s rating to similar to buy from neutral, citing benefits from a weaker pound and the stability of its business.

Futures on the S&P 500 gained 1.3%, indicating that US equities will rebound from their lowest level since March. Shares in Japan were buoyed by a Nikkei newspaper report saying a 20 trillion yen ($196 billion) stimulus proposal has been submitted to Prime Minister Shinzo Abe by a senior official in his party.

The US economy expanded at a 1.1% annualized rate in the first quarter, compared with a previously estimated gain of 0.8%, a Commerce Department report showed on Tuesday.

The MSCI Emerging Markets Index rose 1.2% after falling as much as 0.3%. Eastern Europe and Africa led the advance, with benchmarks in Hungary, South Africa and Turkey climbing at least 2%.

Currencies

The pound strengthened 1.3% to $1.3401, supported by technical indicators that suggested the record two-day loss since Thursday’s vote was excessive. The move comes even after the UK was stripped of its top credit grade by S&P Global Ratings. Fitch Ratings also lowered the country’s rank.

“There’s a bit of a temporary reprieve after days of volatile and adverse market moves," said Viraj Patel, a foreign-exchange strategist at ING Groep NV in London. “Today’s EU talks could provide some new news and hence some direction to markets."

The yen weakened 0.4% to 102.40 per dollar, after surging more than 4% over the last two sessions. The Bloomberg Dollar Spot Index retreated 0.5%, following a two-day jump of 2.7%.

The currencies of commodity-exporting nations rallied, with South Africa’s rand climbing 1.7%, the most among 31 major peers. Russia’s ruble and Mexico’s peso advanced at least 1.2% as oil rose.

Indonesia’s rupiah posted the biggest gain in three weeks, up 1.3%, after parliament approved a tax amnesty bill to boost government revenue. South Korea’s won climbed 1 percent after the country announced a stimulus package of more than 20 trillion won ($17 billion).

Commodities

The Bloomberg Commodity Index gained 2%. Crude oil climbed 3% to $47.72 a barrel in New York, while copper and nickel were up more than 1.5% in London.

Gold slipped 1.1% to $1,309.43 an ounce on speculation that recent gains have been overextended. In the previous two days, prices jumped 5.4%, the most since 2009.

“Those sorts of spikes tend to be followed by a form of retracement, and that’s what we’re seeing," said David Lennox, a resource analyst at Fat Prophets in Sydney. “We’re not saying that the uncertainty and the safe-haven aspect of Britain pulling out of the EU is over yet. So there’s still going to be some potentially good upside for gold."

Bonds

The yield on Spain’s 10-year bond fell 14 basis points to a one-year low of 1.32% and the rate on similar-maturity Italian notes fell eight basis points to 1.43%. German bonds dropped with the yield on benchmark bunds rising two basis points to minus 0.10%.

Treasuries declined, with the 10-year yield increasing two basis points to 1.46%. It was 1.75% ahead of the UK referendum results. The yield on Bank of America Corp.’s Global Broad Market Index fell to 1.11% on Monday.

The Markit iTraxx Europe Index of credit-default swaps on investment-grade companies dropped four basis points to 94 basis points. A gauge of swaps on high-yield companies declined 14 basis points to 401 basis points. Both indexes remain near the highest in about four months.

The average yield of euro-denominated corporate junk bonds surpassed 5% on Monday for the first time since April, based on Bank of America Merrill Lynch index data. Bloomberg

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