Global stocks climb, dollar dips ahead of Federal Reserve minutes
NEW YORK (Reuters) – Stocks around the world gained for a second straight day on Wednesday, boosted by upbeat global economic data, as investors awaited minutes of the Federal Reserve’s December meeting in which the US central bank raised interest rates.
The dollar retreated from a 14-year high against a basket of currencies, and oil prices ticked higher on expectations that US crude inventories are falling.
MSCI’s world index, which tracks shares in 46 countries, rose 0.71% to a three-week high.
The index was helped by a batch of rosy economic reports from Europe and received a further boost after US stocks opened higher.
US stocks extended gains into the second trading day of the new year, supported by advances in consumer-discretionary stocks.
Investors were waiting for the Federal Reserve to release the minutes of its December meeting in which it raised interest rates. Investors want to assess policy makers’ view on the economy and US president-elect Donald Trump’s incoming administration.
“It will be interesting to see just how much the [incoming Trump administration’s] fiscal stimulus plans contributed to the interest-rate forecasts from Fed policy makers in December and whether there is potential for the pace to be faster still,” Oanda senior market analyst Craig Erlam said.
The Dow Jones Industrial Average rose 32.99 points, or 0.17%, to 19,914.75 in early afternoon trading, the S&P XEROX CEO Jeff Jacobson rings a ceremonial bell on the floor of the New York Stock Exchange yesterday. US stocks extended gains into the second trading day of the new year, supported by advances in consumer-discretionary stocks. 500 gained 9.69 points, or 0.43%, to 2,267.52, and the Nasdaq Composite added 34.53 points, or 0.64%, to 5,463.61.
European shares edged down from a one-year high with retailers in focus after Next cut its profit guidance and cautioned on future trade. Europe’s broad FTSEurofirst 300 index fell 0.27% to 1,440.67.
The dollar edged down from a 14-year high against a basket of currencies, with investors cautious about increasing bets on the greenback before getting fresh clues on the US economy and the timing of interest-rate rises.
The dollar index, which measures the greenback against a basket of six major rivals, was down 0.58% to 102.61, having hit a peak of 103.82 on Tuesday.
Oil prices ticked higher on expectations that US crude inventories are falling and signs that oil producers will stick to output cuts that took effect this week.
Brent crude was up 0.67% at $55.84 a barrel, while US crude was up 0.65% at $52.67.
In bond markets, US Treasury debt yields edged higher for a second straight day in quiet trading, continuing to benefit from increased market appetite for risk, with the rise in stocks and oil prices as well as an improving global economic environment.
“[On Tuesday] we had a confluence of factors that led to higher yields: We had strong inflation numbers from overseas; we had oil starting to rally,” said Subadra Rajappa, head of US rates strategy at Societe Generale in New York.
“This is just momentum from [Tuesday’s] sell-off that’s really pushing yields higher today,” she said.
The US 10-year note was down 3/32 in price to yield 2.463%, compared with 2.454% late on Tuesday.
Gold approached a fourweek high helped by the retreating dollar and increased demand from major consumers China and India. Spot gold prices were up 0.49% at $1,164.45.