Stocks Continue Record Climb; BOJ Holds Before ECB: Markets Wrap
European equities followed markets from Tokyo to Sydney higher, and the MSCI All-Country World Index traded at a record high. With the Bank of Japan delaying the time-frame for reaching its inflation target -- a sign its stimulus is in place for a while to come -- attention turns to the European Central Bank’s meeting for clues on policy paths. Oil held onto gains as stockpiles decreased. The U.S. dollar strengthened for a second day after hitting a 10-month low Tuesday, though it was still down for the week.
Like the BOJ, the ECB is forecast to keep policy on hold Thursday. A report that the bank has been examining options for asset purchases does add to speculation that Mario Draghi will concede time is approaching to adjust the bond-buying program as the economic recovery expands.
U.S. benchmark bond yields are falling with the dollar this week as investors pare expectations for progress on President Donald Trump’s policy agenda. Markets have trimmed chances for Federal Reserve rate hikes to less than 50 percent by year-end despite assertions from policy makers that another increase seemed appropriate.
Stocks
The MSCI ACWI Index was up 0.1 percent at a record high as of 3:05 p.m. in Hong Kong. The Euro Stoxx 50 climbed 0.4 percent, building on Wednesday’s 0.6 percent gain. The FTSE 100, which also gained 0.6 percent yesterday, advanced 0.3 percent. S&P 500 futures were unchanged after the underlying gauge rose 0.5 percent to a record 2,473.83 on Wednesday. Australia’s S&P/ASX 200 Index gained 0.5 percent and Japan’s Topix Index rose 0.7 percent to close at its highest in nearly two years. The VIX index closed below 10 for a record fifth consecutive day.
Currencies and bonds
The Aussie traded down 0.3 percent at 79.25 U.S. cents after reaching a two-year high of 79.89 cents as a characteristically volatile monthly jobs report for June showed a surge in full-time employment. It’s the best-performing G-10 currency this year, climbing 10 percent. The yen slipped 0.1 percent to 112.12 per dollar. The pound and euro were flat. The Bloomberg Dollar Spot index gained 0.1 percent, paring its weekly loss to 0.3 percent. The dollar was up against all major Asian currencies bar the Philippine peso, which strengthened 0.2 percent.
Commodities
WTI crude was flat after surging 1.6 percent Wednesday when government data showed U.S. crude and gasoline stockpiles continue to fall, allaying anxiety about a supply glut. Gold was 0.2 percent lower at $1,239.28 an ounce.
