U.S. Stocks Rally, Dollar Weakens with Treasuries: Markets Wrap

July 9th, 2018


Category: Miscellaneous

(Bloomberg) – U.S. equities joined a global rally that began in Asia as investors set aside concern about escalating trade tensions to focus on the coming earnings season. The dollar fell against almost all its major peers.

The S&P 500 Index rose for a third day, while miners and energy producers took the Stoxx Europe 600 Index to a fifth consecutive advance, the longest winning streak since March. The MSCI Asia Pacific Index jumped the most in a month. Commodities and emerging-market equities found support from the weakening greenback, while Treasuries fell with core

European bonds as ECB executive board member Benoit Coeure played down any discussions of an “Operation Twist” for debt reinvestments. The Chinese yuan rebounded after its fourth weekly decline, and the British pound climbed on optimism Theresa May can contain the latest government crisis over Brexit.

The start of earnings season this week may divert some attention away from the trade war that’s kept global stocks under pressure, while data out Friday supported sentiment. The U.S. jobs report showed another month of gains in excess of 200,000, while German industrial production beat all estimates for May. Those signs of strength contrasted with protectionist tensions after China retaliated against U.S. tariff increases.

In emerging markets, currencies headed for the biggest advance since January led by the Turkish Lira and the Polish Zloty as the dollar weakened dollar and amid an apparent lull in the trade war. Metals climbed, with gold, copper and aluminum all trading higher.

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