NEW YORK, United States (AFP) — Global stocks ran the table on Monday, rising in New York, Europe and Asia on a mix of optimism, resilient oil prices and renewed calm on the Korean peninsula.
Wall Street eked out fresh record closes in advance of this week’s Federal Reserve meeting, which is expected to announce a drawdown of its massive bond holdings, sending bond yields higher.
Despite Friday’s North Korea missile test, the second in a month, the weekend was calm. Fading tensions persuaded investors to rotate out of haven investments like gold and back into stocks.
Asia kicked off the firmer trend, followed by London, Frankfurt and Paris which all closed higher on burgeoning investor optimism spurred by Friday’s round of record finishes on Wall Street.
The Fed is due to begin a two-day monetary policy meeting in Washington on Tuesday and markets will watching closely to see how Chair Janet Yellen describes recent trends in inflation in the world’s largest economy, looking for clues about the timing of the next interest rate hike.
Jack Ablin of BMO Private Bank told AFP investors likely now expect the Fed will brush aside concerns about economic damage from back-to-back hurricanes Harvey and Irma, and raise interest rates for a third time later this year.
Sterling still shines
US economists have been flummoxed by persistently weak inflation this year but consumer prices jumped 0.4 percent in August, helping push the market odds of a December rate hike above 60 percent by Monday, up from just 37 percent a month ago.
“They will likely take on a more aggressive stance,” Ablin said of the Fed, which could be seen as an endorsement of current economic conditions.
“Investors are looking at it as the Fed seeing an economy strong enough to sustain tightening.”
In New York, the Dow Jones Industrial Average rose 0.3 percent, the broader S&P 500 gained 0.2 percent and the Nasdaq added 0.1 percent.
The pound meanwhile continued to shine against the dollar after the Bank of England indicated last week that it would probably tighten monetary policy itself very soon.
The British currency ducked beneath $1.36, but remained close to its highest level against the dollar since Britain voted to leave the European Union in June 2016.
BoE Governor Mark Carney said Thursday the chances of a rise had increased. This was followed Friday by another policymaker signaling a move in the coming months.
Central banks are shifting from their easy-money policies as the world economy slowly improves, and the European Central Bank is also set to wind down its own stimulus.
Key figures around 2100 GMT
New York – DOW: UP 0.3 percent at 22,331.35 (close)
New York – S&P 500: UP 0.2 percent at 2,503.87 (close)
New York – Nasdaq: UP 0.1 percent at 6,454.64 (close)
London – FTSE 100: UP 0.5 percent at 7,253.28 points (close)
Frankfurt – DAX 30: UP 0.3 percent at 12,559.39 (close)
Paris – CAC 40: UP 0.3 percent at 5,229.32 (close)
EURO STOXX 50: UP 0.3 percent at 3,526.74 (close)
Hong Kong – Hang Seng: UP 1.3 percent at 28,159.77 (close)
Shanghai – Composite: UP 0.3 percent at 3,362.86 (close)
Tokyo – Nikkei 225: Closed for public holiday
Euro/dollar: UP at $1.1954 from $1.1947 at 2100 GMT
Dollar/yen: UP at 111.56 yen from 110.86 yen
Pound/dollar: DOWN at $1.3501 from $1.3593
Oil – Brent North Sea: DOWN 14 cents at $55.48 per barrel
Oil – West Texas Intermediate: UP 2 cents at $49.91
© Agence France-Presse
