Global stocks rise as oil rebounds, gold price advances

Sydney-Australia (May 11)  Global stocks advanced as benchmark indexes traded near multi-year highs and a rebound in oil boosted energy producers. Gold snapped a six-day losing streak.

South Korean equities reached a fresh record, while the Nikkei 225 Stock Average approached the 20 000 level. Chinese shares erased earlier losses, while European equities retreated.

Gold rose for the first time in seven days, while oil extended a rebound from last week’s rout. The New Zealand dollar declined as New Zealand’s central bank chief downplayed rising price expectations even as he projected economic growth will gather pace.

Global equities have advanced and volatility faded after Emmanuel Macron won France’s presidential election, while corporate earnings and positive US data buoyed sentiment about economic growth. Amid signs of a strengthening American labour force, investors are paying closer attention to comments from Federal Reserve officials for clues on the path for interest rates this year.

Fed dove-turned-hawk Eric Rosengren warned that the central bank was in danger of lifting its foot off the policy accelerator too slowly, and called for more aggressive action to prevent the economy from overheating. Dallas President Robert Kaplan said his base-case for rate hikes this year is still three, but said he’s “very cognizant” of the fact inflation pressures have been more muted.

Here are the key events investors will be scrutinizing:

New York Fed President William Dudley will give a speech in Mumbai, a chance for investors to further assess US monetary policy. The Bank of England on Thursday publishes its interest-rate decision and quarterly Inflation Report.

Here are the main moves in markets:

Stocks

The MSCI Asia Pacific Index rose 0.3% as of 09:09, heading toward the highest closing level since June 2015. Japan’s Topix index rose 0.1%, while the Nikkei 225 climbed 0.3% to 19 961.55. The Stoxx Europe 600 fell 0.1%, after gaining 0.2% on Wednesday to the highest level since August 2015.

The Shanghai Composite Index rose 0.3%, reversing earlier declines. The gauge fell for six of the past seven days as investors assessed regulatory intervention in the country’s financial markets. The Hang Seng added 0.5%.

Taiwan’s Taiex increased 0.3% to the highest level since 2000. South Korea’s Kospi advanced 1.2% to a fresh record, erasing Wednesday’s declines following the presidential election. The gauge jumped 2.3% on Monday.

New Zealand’s S&P/NZX 50 surged 0.9% to the highest level since September. Futures on the S&P 500 slipped 0.1% after the underlying gauge rose 0.1% on Wednesday, closing at an all-time high. 

Currencies

The yen rose 0.1% to 114.16 per dollar, after declining for nine of the past 10 sessions. The South Korean won jumped 0.7%. The euro added 0.1% to $1.0876. The Bloomberg Dollar Spot Index was flat. The kiwi fell 1.2% to 68.57 US cents. The Reserve Bank of New Zealand kept its benchmark rate unchanged and said it will keep rates there for an extended period in expectation that inflation will slow.

Many observers had expected the central bank to move to a tightening bias after inflation picked up much more quickly than forecast. The Canadian dollar dropped 0.4% after Moody’s Investors Service downgraded shares of six Canadian banks.

Bonds

The yield on 10-year Treasury notes fell two basis points to 2.40%, after rising for the past three sessions. New Zealand benchmark yields slipped five basis points to 3.02%, while those on 10-year Australian notes were little changed at 2.65%.

Commodities

West Texas oil rose 0.7% to $47.68 a barrel after jumping 3.2% on Wednesday. The rebound comes after a 6.3% slide last week. US crude stockpiles fell by more than twice what had been forecast, continuing a decline from a record. Gold added 0.2% to $1 222.02, following a six-day slide, the longest losing streak since October.

Source: fin24