Asian stock markets rallied on Thursday while the dollar dropped and global bond yields plunged, with the 10-year U.S. yield falling below two percent, after the Federal Reserve signaled possible interest rate cuts later this year.
Asian Stock Markets
- MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.92%, led by gains in China.
- Tokyo’s Nikkei advanced 0.67%.
- On Wall Street, the S&P 500 gained 0.30% to 2,926, just 19 points off its record closing high hit on April 30.
Currency Markets
- The Chinese yuan has recovered over the past couple of days on hopes of U.S.-China talks next week on the sideline of the Group of 20 summit.
- The offshore yuan rose 0.3% to at 6.8722 to the dollar, hitting a five-week high of 6.8677 at one point.
- The euro rose 0.3% to $1.1265 after the Fed’s dovish signals undermined the dollar’s yield attraction.
- The dollar fell 0.5% on the yen to hit a five-month low of 107.55 yen extending losses after the Bank of Japan stood pat on policy.
- The British pound rebounded 0.35% to $1.2688 from Tuesday’s 5-1/2-month low of $1.2507.
Commodities
Members of the Organization of the Petroleum Exporting Countries (OPEC) agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates. Oil producers will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.
- Gold jumped above its long-held resistance around $1,350 per ounce to its highest level since September 2013, rising to as high as $1,392.3. It last stood at $1,381.00, up 1.56%.
- Oil prices held firm, as official data showed U.S. crude stocks fell more than expected and as OPEC and other producers finally agreed a date for a meeting to discuss output cuts.
- U.S. West Texas Intermediate (WTI) crude futures rose 1.5% to $54.57 a barrel.
