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London - European shares rose for the first time in a week and emerging markets advanced as a gauge of commodities climbed for the sixth straight day and minutes of the Federal Reserve’s last meeting damped prospects for a US interest-rate hike.
Miners led gains on the Stoxx Europe 600 Index and energy producers also rallied after Brent crude traded above $50 a barrel, while an MSCI index of emerging-market equities advanced to a one-year high.
The dollar weakened versus almost all of its major peers following the release of the Fed record, which showed officials saw little risk of a sharp uptick in inflation and pushed odds of a rate increase this year back below 50%. The pound surged on a jump in UK retail sales.
Speculation that central banks in the world’s biggest economies will remain accommodative amid uneven growth propelled global equities to a one-year high this month and sent the dollar tumbling.
The Fed minutes struck a more dovish tone when compared with comments this week from New York Fed chief William Dudley, who flagged the prospect of a rate hike as soon as next month. Dudley will hold a press briefing on Thursday in New York and his San Francisco counterpart, John Williams, is also due to speak.
"Central banks are going to remain quite accommodating," said Benno Galliker, a trader at Switzerland’s Luzerner Kantonalbank. "I am optimistic about the market overall - there is no other option but equities at the moment, as rates are going down and down and down."
Stocks
The Stoxx 600 added 0.5% at 8:22 a.m. in New York, with all but three industry groups rising.
Vestas Wind Systems surged 9.5% after increasing its annual guidance. Nestle SA, which has the highest weighting in the Stoxx 600, advanced 1% as chief executive officer Paul Bulcke forecast pricing will rebound in the coming months, after the world’s biggest food company reported the slowest first-half sales growth since 2009.
S&P 500 futures slipped 0.1%, after shares eked out gains on Wednesday following the release of the Fed minutes. Among stocks moving in premarket New York trading, Wal-Mart Stores rose 3% after increasing its annual earnings forecast as second-quarter results topped analysts’ estimates. Cisco Systems fell 1.3% in German trading after the biggest maker of equipment that runs the Internet announced plans to cut about 7% of its workforce.
As well as jobless claims data, investors will look to earnings reports from companies including Wal-Mart for indications of the state of the US economy. Fewer than 30 of the S&P 500’s companies have yet to report. Of those that have already done so, 78% beat profit projections and 56% topped sales predictions.
The MSCI Emerging Markets Index rose 0.6%, led by technology stocks. Tencent Holdings jumped to an all-time high after a 47% surge in profit beat analysts’ estimates. Samsung Electronics also climbed to a record. The two stocks have the biggest weightings in the MSCI equity benchmark.
Japan’s Topix index dropped 1.6%, while the Philippine Stock Exchange Index erased losses after the government reported better-than-expected economic growth for the second quarter.
Currencies
The Bloomberg Dollar Spot Index fell 0.2%, approaching a three-month low. It posted a 0.2% gain on Wednesday, having been up as much as 0.5% ahead of the Fed minutes’ publication.
Britain’s pound was the biggest winner against its US counterpart, climbing after a report showed UK retail sales jumped more than economists forecast in the month after Britain voted to quit the European Union. Sterling strengthened 0.8% to $1.3151.
The euro rose 0.3% to $1.1318 as policy-meeting minutes showed European Central Bank officials “widely” agreed that their immediate reaction to the outcome of the UK’s referendum shouldn’t fuel excessive speculation about more stimulus.
Australia’s dollar climbed 0.2% after a report showed Australia’s unemployment rate unexpectedly fell to 5.7% in July. The MSCI Emerging Markets Currency Index gained as much as 0.4% after falling 0.5% on Wednesday. The Malaysia’s ringgit was the biggest gainer, rising 0.5%. Mongolia’s tugrik fell for a record 24th day even as the central bank raised its key rate to 15% from 10.5%.
Commodities
The Bloomberg Commodity Index was set for the most enduring rally in more than two months as the dollar weakened. West Texas Intermediate crude rose for a sixth day, the longest advance in more than a year, as US crude and gasoline stockpiles dropped from the highest seasonal level in at least two decades.
Oil added 0.6% to $47.07 a barrel after gaining more than 12% over the previous five sessions. Brent added as much as 0.4% to trade above $50 for the first time in more than a month. Industrial metals also rose, with copper gaining 1.3% to $4 836 a metric ton and nickel adding 1.3%.
Bonds
Treasuries due in a decade were little changed, leaving the yield at 1.54%. Morgan Stanley recommends buying five-year notes, saying the absence of inflationary pressures in the world’s biggest economy will push the probability of a Fed rate increase this year to 30% in coming weeks.
The likelihood was 49% on Wednesday, according to Bloomberg calculations based on Fed fund futures. The yield on Australia’s 10-year bonds fell four basis points to 1.87%, while that on similar-maturity notes in Germany declined two basis point to minus 0.08%.
Yields on Ukrainian bonds maturing September 2019 climbed 18 basis points to 8.37%, the highest on closing basis since June 28, after Ukrainian President Petro Poroshenko said in a televised speech the probability of an escalation in the conflict with Russia remains "very significant."
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