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Stocks trim monthly gain before GDP, oil climbs

Sydney - Global equities retreated, trimming a sixth straight monthly gain, as geopolitical concerns intensified and investors assessed corporate earnings before a report on growth in the world’s largest economy.

The MSCI All-Country World Index dropped after reaching a record earlier in the week, while the regional gauge for Asian equities halted a six-session rally. European share retreated for a second day.

Crude climbed back above $49 a barrel after tumbling on concern over a supply glut. The euro headed for a weekly gain, regaining some of Thursday’s losses that came after the European Central Bank signaled its commitment to stimulus even as the region’s economy firms.

Geopolitical concerns continued to loom over the markets. Donald Trump said he sees the chance of a “ major, major conflict” with North Korea over its nuclear programme, though he prefers a diplomatic solution, according to an interview with Reuters.

The Trump administration has stirred markets this week as it unveiled a plan to cut taxes and gave mixed signals on its intentions for the North American trade agreement. 

Global stocks are near a record high as investors bet on improving global economic growth and stronger earnings from some of the world’s largest firms lift sentiment. Amazon.com and Alphabet climbed after US market hours on Thursday as results topped estimates. PetroChina swung to a profit thanks to a surge in oil prices.

In Europe, ECB President Mario Draghi showed growing enthusiasm about the state of the euro-area economy, while cautioning that inflation pressures remain too weak to contemplate paring stimulus.

The Bank of Japan kept its policies unchanged while lowering its inflation forecast, underscoring that any exit from its monetary easing remains far away. Japanese data on Friday indicated that a modest recovery is continuing, yet inflation largely refuses to budge.

Events that will catch investors’ eye as the week wraps up:

The US Congress is considering a continuing resolution to avoid a government shutdown. US GDP is due. It’s projected to show the economy expanded at a 1% annualised rate in the first quarter, the weakest pace in a year. Russia is expected to announce a decision on monetary policy.

Here are the main moves in markets:

Stocks

The MSCI All-Country index was down less than 0.1% as of 09:10, paring its monthly advance to 1.5%. The MSCI Asia Pacific Index fell 0.3%. The measure is up 1.4% for the week, and is poised for a fourth monthly gain. The Stoxx Europe 600 Index slipped 0.1%, dropping for a second day after reaching the highest level since August 2015.

Japan’s Topix fell 0.3%. The gauge gained 2.9% for the week, the best performance this year. South Korea’s Kospi slipped 0.2 % from the highest level since 2011. The Hang Seng Index in Hong Kong dropped 0.4%, and the Shanghai Composite Index added 0.1%.

The latter gauge is down 2.1% in April. Contracts on the S&P 500 were down 0.1%. The underlying gauge rose 0.1% on Thursday and the Nasdaq 100 Index jumped 0.5% to a record.

Currencies

The Bloomberg Dollar Spot Index rose less than 0.1%. The yen added less than 0.1% to 111.30 per dollar. The currency is down 2% since April 21. The euro was at $1.0887, up 0.1% and heading for a third weekly gain as concerns eased in the wake of the first round of French elections.

Commodities

Oil rose 0.9% to $49.42 a barrel, after tumbling 1.3% on Thursday. Crude is down 2.3% this month. Gold climbed 0.1% to $1 265.40. The metal is up 1.3% for April, its fourth monthly advance.

Bonds

The yield on 10-year Treasuries fell less than one basis point to 2.29%, retreating for a third straight day. Australian benchmark yields lost four basis points to 2.58%.

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