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Sydney - Global stocks extended an all-time high as markets from Hong Kong to London followed a rally in the U.S. The dollar slumped against the yen.
The MSCI All-Country World Index climbed for a third day, as Chinese shares traded in Hong Kong resumed their rally and European stocks extended a 14-month high. The dollar slipped against the yen as Federal Reserve Bank of Cleveland President Loretta Mester said policy makers don’t want to surprise the market on interest rates.
The euro slid for a fourth day. Australian debt held declines after the government’s biggest-ever bond sale.
Global equities are trading at the highest levels ever even as money managers are grappling with political uncertainty as the Fed prepares to lift interest rates again later this year.
Expectations for a rate increase at the next policy meeting have been on the rise since chair Janet Yellen indicated February 14 that she foresees additional tightening this year regardless of whether President Donald Trump follows through on plans to pursue a pro-growth fiscal policy.
While French presidential elections and the UK’s Brexit plans present additional potential risks, investors have clung to optimism in global economic growth amid signs of an inflation pickup. Volatility gauges for equities around the world are trading near the lowest levels in more than a year.
Here are some events that investors are watching out for:
The Fed releases minutes on Wednesday from its most recent meeting, possibly giving investors a look into how members see Trump’s policies. Data should show the US housing market perking up at the start of the year. It’s International Petroleum Week in London and top OPEC, government and company officials are attending.
Here are the main market moves:
Stocks
The Stoxx Europe 600 Index climbed 0.5% as of 10:18, gaining for a fourth straight day to the highest since December 2015. Lloyds Banking rose 3.6% as the mortgage lender swung to a quarterly profit and boosted its dividend.
In Hong Kong, the Hang Seng China Enterprises Index advanced 1.2% as banks and insurers rallied. The Hang Seng Index jumped 1%.
Hong Kong’s economic growth may accelerate this year after registering its slowest pace since 2012 last year, Financial Secretary Paul Chan said. Futures on the S&P 500 rose 0.1%. The index added 0.6% on Tuesday, with the Dow Jones Industrial Average, the Nasdaq Composite Index and the Russell 200 Index closing at all-time highs.
Currencies
The Bloomberg Dollar Spot Index rose 0.1%, reversing an earlier drop of 0.1%. The yen rose 0.3% to ¥113.33/$, following two days of declines. The Australian dollar strengthened 0.3%, and the British pound added 0.2%.
The euro slipped 0.3% to $1.0504, declining for a fourth straight day. Mester reiterated comments made on February 20 that she would be “comfortable” with higher rates in response to rising price pressures, though she said the Fed was not yet “behind the curve” in addressing inflation.
Bonds
The yield on 10-year Treasuries rose two basis points to 2.45%. Australian 10-year yields climbed three basis points to 2.83%. The government sold $8.5bn of 11-year debt notes in its biggest-ever bond transaction, as investors hungry for higher yields set aside concerns stubborn budget deficits will cost the nation its AAA credit rating.
Commodities
Gold fell 0.1% to $1 234.75, after alternating between gains and losses over the previous four sessions. Iron ore slipped 0.6%, after Tuesday’s 3.2% surge. Last year’s rally has extended into 2017, aided by rising steel prices and elevated demand for higher-grade ores, though some miners are flagging concerns that recent gains are probably overdone.
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