Global stocks rally on growth optimism, oil drops

Cape Town - Global stocks rallied after private American hiring data bolstered confidence in the global economy. Oil headed for a three-week low as US output expanded.

European shares advanced and the MSCI Asia Pacific Index traded at the highest in two years after US benchmarks closed at records. The dollar held on to gains triggered by a report showing companies added more workers to US payrolls in May than forecast.

China’s offshore yuan tumbled the most since February amid signs that a funding crunch is beginning to abate. Oil was poised for the biggest weekly drop since May 5 as industrial metals including copper declined.

Global equities extended this year’s advance to more than 10%, setting a fresh record, as data showed growth in the world’s largest economy is intact. With investors primed for an interest-rate increase at this month’s Federal Reserve meeting, all eyes will turn Friday to the latest US hiring report.

Traders also continue to watch for upheaval from US President Donald Trump’s administration. Renewable energy stocks were mixed Friday as investors assessed the implications of Trump’s plan to withdraw from the Paris climate pact.

Here are some key upcoming events:

The US jobs report on Friday may bolster the case for a rate increase, with a gain of 182 000 positions expected. The US monthly trade balance probably widened to $41.1bn in April, from $43.7bn, a separate report may show Federal Reserve officials Patrick Harker and Robert Kaplan give speeches ahead of the so-called quiet period going into the central bank’s rate decision later this month.

Here are the main moves in markets:

Stocks

The Stoxx Europe 600 Index increased 0.6% as of 10:46, with autos and banks gaining the most. Oil and gas shares fell along with miners. Futures on the S&P 500 rose 0.2%. The S&P 500, the Nasdaq Composite and Nasdaq 100 indices each closed at fresh records on Thursday.

Currencies

The British pound dropped 0.2% to $1.2860, while the euro rose less than 0.1% to $1.1220. The yen slipped 0.1% to 111.51 per dollar, after falling 0.5% on Thursday. The Bloomberg Dollar Spot Index added 0.1%, extending a 0.2% advance in the previous session.

Bonds

The yield on 10-year Treasuries was little changed at 2.21%. The UK benchmark yield dropped two basis points to 1.06%. French and German yields fell one basis point

Commodities 

Gold slid 0.3% to $1 260.78, heading for its first weekly drop in a month. WTI crude oil dropped 1.9% to $47.44 a barrel. It’s on course to fall 5% this week as US crude production expanded to the highest level since August 2015, countering a slide in stockpiles. Copper dropped 1.3%, leading industrial metals lower

Asia

The MSCI Asia Pacific Index climbed 0.9% to the highest since April 2015. The Nikkei 225 Stock Average rallied 1.6% and topped 20 000 for the first time since December 2015. China’s offshore yuan tumbled the most since February amid signs that a funding crunch is beginning to abate. The onshore currency slipped 0.2%, breaking a four-day rally.

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