 "Stocks gain as Fed seen pulling off hike")
Don't fear the Fed is the new mantra for global markets.
Equities rose to a two-week high amid increasing investor optimism that the world economy can withstand higher interest rates from the Federal Reserve. Gold fell amid a retreat in the dollar, while oil maintained gains after a government report on crude inventories.
US shares looked for consecutive climbs after alternating between gains and losses for seven sessions, European equities jumped and emerging-market stocks rose the most in six weeks. South Korea's won led currencies higher even as China set the yuan's reference rate at the weakest level since 2011.
"Yesterday was certainly a big day, and with the breadth in the market and some of the key groups rallying with bank stocks and semiconductor stocks, these are things telling us that we might be able to hold the rally this time," Matt Maley, an equity strategist at New York-based Miller Tabak & Co LLC, said by phone.
Traders are now pricing in a one-in-three chance of higher borrowing costs in June. That's up from four percent last Monday. July is the first month with more than even odds for a rate hike. Fed Chair Janet Yellen is scheduled to speak on Friday after European markets close.
The Stoxx Europe 600 Index added 1.2 per cent, with almost all industry groups climbing. Banks and energy producers posted the biggest gains. The equity measure closed above its 50-day moving average on Tuesday for the first time after slipping below it earlier this month. That sends a short-term bullish signal in technical analysis, according to Saxo Bank A/S trader Pierre Martin.
The MSCI Emerging Markets Index rose 1.7 per cent, with technology and energy shares leading the advance. The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong surged 2.8 per cent, the most in more than a month. Benchmark gauges in South Korea, Taiwan, the Philippines, Russia and Dubai increased at least 1 percent.
The Bloomberg Dollar Spot Index fell 0.1 per cent, paring its monthly advance to 3.4 per cent.
The yen was little changed at about 110 versus the greenback after Goldman Sachs Group Inc. predicted the Japanese currency would slide 12 per cent by this time next year.
The Canadian dollar traded near the weakest level in seven weeks as the nation's central bank maintained its key benchmark rate at 0.5 percent.
The MSCI Emerging Markets Currency Index climbed 0.2 per cent. The won rose 0.9 per cent, boosted by optimism that strength in the US economy will shore up demand for South Korean exports. Malaysia's ringgit strengthened 0.5 per cent and Russia's ruble gained for a second day to a one-week high.
Commodities
Oil pared gains in New York after reaching the highest closing price in seven months after government report showed crude inventories fell 4.23 million barrels in the US last week. Analysts surveyed by Bloomberg ahead of the release had anticipated a crude stockpile decline of two million barrels in the week ended May 20.
West Texas Intermediate rose 0.7 per cent to $48.95 a barrel and Brent added 1.2 per cent to $49.20. WTI closed at a premium to Brent Tuesday for the first time in almost two weeks.
Gold dropped to the lowest level in seven weeks. Futures fell 0.6 per cent to $1,225.30 an ounce. Most industrial metals declined, with nickel dropping 0.1 per cent and aluminum losing 0.3 per cent. Copper rose 1.3 per cent to $4,659 a tonne.
Bonds
The yield on 10-year US Treasuries fell one basis point to 1.86 per cent. The US is selling $34 billion of five-year securities on Wednesday after investors snapped up a $26-billion auction of two-year notes on Tuesday, leaving primary dealers with the lowest award at a sale of the debt in data going back to 2003.
Treasuries are the worst performers among developed bond markets in the past two years as the Federal Reserve raises interest rates, while other major central banks ease monetary policy.
Greece's bonds advanced, pushing the 10-year yield below seven per cent for the first time since November. Euro-area finance ministers and the International Monetary Fund reached an agreement that will allow for the release of 10.3 billion euros of aid to the Mediterranean nation.
Equities rose to a two-week high amid increasing investor optimism that the world economy can withstand higher interest rates from the Federal Reserve. Gold fell amid a retreat in the dollar, while oil maintained gains after a government report on crude inventories.
US shares looked for consecutive climbs after alternating between gains and losses for seven sessions, European equities jumped and emerging-market stocks rose the most in six weeks. South Korea's won led currencies higher even as China set the yuan's reference rate at the weakest level since 2011.
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The S&P 500 Index added 0.6 per cent to 2,089.21 at 11:53 am in New York, the highest level in almost a month after a 1.4 per cent rally on Tuesday. Investors weighed data today that showed home prices rose in the first quarter for signs on the health of the economy amid increasing bets that the Fed is confident enough to raise rates.
"Yesterday was certainly a big day, and with the breadth in the market and some of the key groups rallying with bank stocks and semiconductor stocks, these are things telling us that we might be able to hold the rally this time," Matt Maley, an equity strategist at New York-based Miller Tabak & Co LLC, said by phone.
Traders are now pricing in a one-in-three chance of higher borrowing costs in June. That's up from four percent last Monday. July is the first month with more than even odds for a rate hike. Fed Chair Janet Yellen is scheduled to speak on Friday after European markets close.
The Stoxx Europe 600 Index added 1.2 per cent, with almost all industry groups climbing. Banks and energy producers posted the biggest gains. The equity measure closed above its 50-day moving average on Tuesday for the first time after slipping below it earlier this month. That sends a short-term bullish signal in technical analysis, according to Saxo Bank A/S trader Pierre Martin.
The MSCI Emerging Markets Index rose 1.7 per cent, with technology and energy shares leading the advance. The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong surged 2.8 per cent, the most in more than a month. Benchmark gauges in South Korea, Taiwan, the Philippines, Russia and Dubai increased at least 1 percent.
The Bloomberg Dollar Spot Index fell 0.1 per cent, paring its monthly advance to 3.4 per cent.
The yen was little changed at about 110 versus the greenback after Goldman Sachs Group Inc. predicted the Japanese currency would slide 12 per cent by this time next year.
The Canadian dollar traded near the weakest level in seven weeks as the nation's central bank maintained its key benchmark rate at 0.5 percent.
The MSCI Emerging Markets Currency Index climbed 0.2 per cent. The won rose 0.9 per cent, boosted by optimism that strength in the US economy will shore up demand for South Korean exports. Malaysia's ringgit strengthened 0.5 per cent and Russia's ruble gained for a second day to a one-week high.
Commodities
Oil pared gains in New York after reaching the highest closing price in seven months after government report showed crude inventories fell 4.23 million barrels in the US last week. Analysts surveyed by Bloomberg ahead of the release had anticipated a crude stockpile decline of two million barrels in the week ended May 20.
West Texas Intermediate rose 0.7 per cent to $48.95 a barrel and Brent added 1.2 per cent to $49.20. WTI closed at a premium to Brent Tuesday for the first time in almost two weeks.
Gold dropped to the lowest level in seven weeks. Futures fell 0.6 per cent to $1,225.30 an ounce. Most industrial metals declined, with nickel dropping 0.1 per cent and aluminum losing 0.3 per cent. Copper rose 1.3 per cent to $4,659 a tonne.
Bonds
The yield on 10-year US Treasuries fell one basis point to 1.86 per cent. The US is selling $34 billion of five-year securities on Wednesday after investors snapped up a $26-billion auction of two-year notes on Tuesday, leaving primary dealers with the lowest award at a sale of the debt in data going back to 2003.
Treasuries are the worst performers among developed bond markets in the past two years as the Federal Reserve raises interest rates, while other major central banks ease monetary policy.
Greece's bonds advanced, pushing the 10-year yield below seven per cent for the first time since November. Euro-area finance ministers and the International Monetary Fund reached an agreement that will allow for the release of 10.3 billion euros of aid to the Mediterranean nation.