Stock Rally Extends in Asia; Treasuries Steady: Markets Wrap

Publikuota: 2018-06-07
(180521) -- NEW YORK, May 21, 2018 (Xinhua) -- Traders work at the New York Stock Exchange in New York, the United States, on May 21, 2018. U.S. stocks closed higher on Monday. The Dow rose 1.21 percent to 25,013.29, and the S&P 500 rose 0.74 percent to 2,733.01, while the Nasdaq increased 0.54 percent to 7,394.04. (Xinhua/Wang Ying)  - Wang Ying -//CHINENOUVELLE_CHINE012501/Credit:CHINE NOUVELLE/SIPA/1805220847
(180521) -- NEW YORK, May 21, 2018 (Xinhua) -- Traders work at the New York Stock Exchange in New York, the United States, on May 21, 2018. U.S. stocks closed higher on Monday. The Dow rose 1.21 percent to 25,013.29, and the S&P 500 rose 0.74 percent to 2,733.01, while the Nasdaq increased 0.54 percent to 7,394.04. (Xinhua/Wang Ying) - Wang Ying -//CHINENOUVELLE_CHINE012501/Credit:CHINE NOUVELLE/SIPA/1805220847
 

A global stocks rally extended its run in Asia Thursday on confidence the global economic expansion remains intact and continuing momentum in U.S. technology shares. Treasuries held losses, with 10-year yields just under 3 percent.

Equities gained from Tokyo to Sydney and U.S. and European futures climbed. That came after the S&P 500 Index rose for a fourth consecutive day and the Nasdaq Composite Index chalked up another record high. The dollar slipped, on course to fall for a third day out of four. The euro was poised for its fourth consecutive gain amid talk of an end to the European Central Bank’s quantitative easing program.

The return of risk appetite comes as investors get used to the on-again, off-again threat of protectionism. They’ll now look ahead to the Group of Seven meeting this week for further developments on the trade front, as well as to this month’s meetings of both the Federal Reserve and the European Central Bank. ECB chief economist Peter Praet on Wednesday confirmed next week’s gathering will be pivotal for a decision on when to end its debt-buying program, sinking the region’s bonds.

The renewed rally in global stocks has revived warnings in some quarters that investors are ignoring risks ranging from central banks’ shift to quantitative tightening to trade tensions and excess American borrowing.

“It’s the most insanely overpriced market since March 2000,” David Stockman, U.S. budget director in the Reagan administration, said on Bloomberg Television. He said stock buybacks have created an artificial support for U.S. equities.

Ruptures in emerging-markets assets are also reappearing as Brazil’s real continued to slide. Allianz SE’s chief economic adviser Mohamed El-Erian warned that the nation may be the next emerging-market domino to fall after Turkey and Argentina.

Elsewhere, oil pared losses from a U.S. government report showing a surprise increase in domestic crude stockpiles. Indian bond yields jumped after the Reserve Bank of India raised its key rate for the first time since 2014.

These are some key events to watch this week:

On Thursday, Japanese Prime Minister Shinzo Abe meets with U.S. President Trump at the White House to discuss the planned U.S. summit with North Korea’s Kim Jong Un. Also on Thursday, euro-zone GDP. A Turkish rate decision is due on Thursday. G-7 Leaders’ Summit starts in Quebec Friday through to June 9.

These are the main moves in markets: Stocks

Topix index rose 0.6 percent at the 3 p.m. close in Tokyo. Hong Kong’s Hang Seng Index rose 0.6 percent. Kospi index climbed 0.6 percent. Australia’s S&P/ASX 200 Index jumped 0.6 percent. Futures on the S&P 500 Index rose 0.1 percent. FTSE 100 futures gained 0.3 percent as of 7:10 a.m. in London. The MSCI Asia Pacific Index added 0.6 percent.

Currencies

The Bloomberg Dollar Spot Index fell 0.1 percent. The Japanese yen gained 0.2 percent to 109.96 per dollar. The euro rose 0.2 percent to $1.1793.

Bonds

The yield on 10-year Treasuries were steady at 2.97 percent. Australia’s 10-year yield jumped almost eight basis points to 2.84 percent. The German 10-year bund yield added almost two basis points to 0.48 percent.

Commodities

West Texas Intermediate crude rose 0.5 percent to $65.05 a barrel. Gold was steady at $1,296.90 an ounce. LME copper rose 0.5 percent to $7,253 per metric ton.

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