European stocks extend their rally

On Friday stocks in Europe extended the rally in global equities following a muted session in Asia due to holiday closures. Benchmark Treasury yields pulled back below 2.9 percent and the dollar steadied after sinking to a three-year low against major peers.

The Stoxx Europe 600 Index headed for its best week in more than a year and U.S. equity-index futures also rose after the S&P 500 on Thursday capped its best five days since 2011. Australian shares closed slightly lower, but with most major markets across Asia Pacific shut for Lunar New Year holidays, volumes in the region were light.

The euro weakened, while sterling sank after U.K. retail sales missed estimates, and gilts advanced along with euro-area bonds. The yen pared gains after trading below 106 per dollar for the first time since November 2016 as Prime Minister Shinzo Abe nominated Haruhiko Kuroda to lead the Bank of Japan for another five-year term.

Even with borrowing costs on the rise, investors seem convinced they’re not yet at levels that would hinder equities as economic growth accelerates. While a larger number of economists forecast the Federal Reserve to step up its pace of interest-rate increases, that’s not helping the greenback.

The Stoxx Europe 600 Index increased 0.9 percent as of 11:25 a.m. London time. The U.K.’s FTSE 100 Index climbed 0.7 percent to the highest in more than a week. Germany’s DAX Index rose 0.6 percent. Futures on the S&P 500 Index gained 0.3 percent. Japan’s Topix index rose 1.1 percent as of 4:10 p.m. in Tokyo. Australia’s S&P/ASX 200 Index fell 0.1 percent.

West Texas Intermediate crude rose 0.2 percent to $61.47 a barrel, the highest in a week. Gold rose 0.3 percent to $1,358.24 an ounce, hitting the highest in three weeks with its fifth consecutive advance.