Home / International/ Global shares score latest record high, dollar flexes muscle

Global shares score latest record high, dollar flexes muscle


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 4 October 2017 00:00


London (Reuters): World shares hit their latest in a run of record highs on Tuesday, while the dollar was at it loftiest in 1-12 months as encouraging U.S. data lifted it in tandem with global bond yields.

MSCI’s 47-country ‘All-World’ index which contains more than 2,400 firms was pushed to the fresh peak as Europe’s main bourses added to gains made in Asia and after Wall Street set its own record close again overnight.

It was the tenth new high since late July alone and extends the year’s blizzard of records that started in February to more than 40 with no sign it is about to run out of steam yet.

SEB investment management’s global head of asset allocation Hans Peterson pointed to strong economic and trade data and signs that firms in large economies like the United States and Europe were finally increasing investment spending.

“The fun thing about that is that it will take over from the consumption cycle and means the (global business growth) cycle will be longer than consensus. So I think that is the mechanism that is driving equities at the moment.”

“So we are long equities, we are long emerging markets and we are long Europe. We are risk on.”

Currency and bond markets were also flashing similar signals, especially that the ‘Trumpflation’ trade, which looked to be fatally wounded just a few months ago, was back in force. The dollar climbed 0.2% to 93.74 against a broad basket of other top world currencies. 

That was its highest level since Aug. 17 and came as a firming view that the Federal Reserve will raise U.S. interest rate for a third time this year in December kept two-year U.S. government bond yields hovering at a 9-year high.

Borrowing costs across the euro zone nudged higher too. Southern European bonds continued to underperform meanwhile as political tensions remained in Spain after Sunday’s independence vote in Catalonia was marred by police violence.

The uncertainty also kept the squeeze on the euro. It dipped 0.2% to $1.1709 while the dollar added 0.3% against the yen to 113.11 yen to keep it within reach of last week’s two-month high of 113.26 yen.

Crude oil futures extended losses after tumbling on Monday, as a rise in U.S. drilling and higher OPEC output put the brakes on their recent rally and rekindled concerns about oversupply.

Brent crude slipped 0.4% to $55.90 a barrel, after marking a third-quarter gain of about 20%. US crude fell 0.3% to $50.42.

“The fourth quarter is not too kind to the price of oil, as we switch from summer demand to expectations of winter demand,” said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

Spot gold edged down 0.1% to $1,270.06 per ounce, plumbing its lowest since Aug. 15 as the dollar continued to strengthen.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Designers of Sri Lanka’s Future: Episode I Nihal Ranasinghe

Monday, 23 April 2018

To sustain economic growth, Sri Lanka needs a critical pool of daring people who would see things differently and design a new future.


Lalith: An invincible legacy

Monday, 23 April 2018

The twenty third day of April, 1993 is among a handful of blots in our national hall of shame. It was the day on which a lone gunman, perhaps with conspirators yet unknown, acted to neutralise a political threat by depriving all Sri Lankans of the in


Sri Lanka lost its maritime aspirations 60 years ago

Monday, 23 April 2018

Protectionism was the key factor that prevented Sri Lanka becoming a maritime hub 60 years ago,when our leaders could not see beyond the horizons to develop the nation in the late 50s and early 60s, which opened the doors to Singapore to be what it i


‘The Ants’ as a ‘disruptive’ teledrama: Managerial insights

Monday, 23 April 2018

I hardly watch teledramas, not only because I value my time but also because of their questionable value.


Columnists More