World shares hit 7-week high, dollar vs yen

  • MSCI World Index up 0.23%
  • European shares rose 0.17%; S&P futures rose 0.18%
  • Dollar falls 0.5% versus yen at 6-week low

LONDON/SYDNEY, Aug 1 (Reuters) – Global equities hit a seven-week high on Monday, buoyed by recent strong corporate earnings and expectations of huge interest rate hikes, while the dollar slid against the yen as speculators rallied against the yen. Suddenly exited the unprofitable short position.

Global stocks rose 7% last month and bond markets rallied as investors looked for a peak in official interest rates given slow economic growth.

Markets have rallied after the Federal Reserve’s 75-basis-point hike last week and Fed Chair Jerome Powell’s comments on the economy.

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Chief currency analyst Giles Coglan said, “There is a sense of relief that the Fed is at least eyeing slow growth. They are not going to be pig-led and continue to hike interest rates as the economy slides into deep recession.” falls.” in HYCM.

In addition, upbeat forecasts from Apple (AAPL.O) and Amazon (AMZN.O) on Friday pushed the S&P 500 (.SPX) and the Nasdaq Index (.IXIC) to their biggest monthly percentage gains since 2020.

MSCI’s World Equity Index (.MIWD000000PUS) rose 0.23%. S&P futures dropped 0.18%, however, signaling a lower open on Wall Street, with the index rising 1.42% to a seven-week high on Friday.

The US ISM manufacturing survey for July is scheduled to take place at 1400 GMT, according to a Reuters poll, projected to give an expansive reading of 52.

“We do not think the US is in a general recession yet, but almost certainly will be within a few quarters,” analysts at Deutsche Bank said in a note.

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“This delay is helpful for the markets relative to the price from a few weeks ago, but it’s hard to say whether the outlook is positive.”

Monday’s data showed contraction in the manufacturing sector in France and Germany. read more

European shares were up 0.17% and Britain’s FTSE (.FTSE) was up 0.33%. Central banks in Britain, Australia and India are expecting a hike again this week.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.15% but remained within recent ranges.

The official measure of China’s factory activity contracted in July as fresh virus flare-ups weighed on demand, and the Caixin PMI also missed forecasts. read more

Chinese blue chips (.CSI300) hit a six-week low before recovering ground to trade 0.25% higher.

Japan’s Nikkei (.N225) held 0.7% and South Korea’s (.KS11).

Speculators had largely reduced bets on rate hikes on the yen against the dollar and found themselves squeezed by the sudden change. The dollar was down 0.5% at 132.60 yen after hitting a six-week low.

The dollar outperformed the euro, which has a European energy crisis to deal with, and made little progress last week. The euro was up 0.13% at $1.0231.

The dollar on a basket of currencies was down 0.3% at 105.650, compared to its recent 20-year peak of 109.290.

Bond markets also rallied, with US 10-year yields falling 35 basis points last month in the biggest fall since the start of the pandemic. After hitting its lowest level in nearly four months on Friday, the yield stood at 2.6848%.

The yield curve remains sharply inverted, suggesting that bond investors are more pessimistic on the economy than their equity brethren.

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Italy’s 10-year government bond yield fell to a two-month low.

A fall in the dollar and yields provided relief for gold, which was stable at $1,763 an ounce after jumping 2.2% last week.

Oil prices softened on weak manufacturing data from China and Japan, weighing on the demand outlook, while investors prepared for this week’s meeting of officials of OPEC and other top producers on supply adjustments.

US crude was down 48 cents at $98.13 a barrel, while Brent was steady at $104.17.

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Editing by Sam Holmes and Bradley Perrett

Our Standards: Thomson Reuters Trust Principles.