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GLOBAL MARKETS-Stocks advance as investors eye economic rebound, gold gains

Published 04/05/2021, 05:12 am
Updated 04/05/2021, 05:18 am
© Reuters
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(Adds latest numbers)

* MSCI's all-country world index gains, off record peak

* German yields hit highest since March 2020

* UK, Chinese, Japanese markets closed for holidays

* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Herbert Lash and Tommy Wilkes

NEW YORK/LONDON, May 3 (Reuters) - Gold prices rose and a gauge of global equity markets was not far from a record on Monday as investors remain bullish about the economic recovery ahead of more corporate results and U.S. data that is expected to underline the strength of the rebound.

The dollar eased against a basket of currencies as the yield on Treasury bonds retreated on data showing U.S. manufacturing activity grew at a slower pace in April. yield on the 10-year Treasury note US10YT=RR traded 2.3 basis points lower at 1.6082% after a shortage of inputs restrained factory output as massive fiscal stimulus and rising vaccinations against COVID-19 unleashed pent-up demand.

The dollar index =USD slipped 0.3%, making gold more affordable for holders of other currencies, while sliding Treasury yields reduced the opportunity cost of holding non-interest bearing gold.

In Europe, stocks closed higher after the European Commission outlined plans to loosen COVID-19 restrictions on tourism. Strong factory and retails sales data and a robust earnings season added to investor optimism.

The pan-European STOXX 600 index .STOXX closed up 0.6% and MSCI's benchmark for global equity markets .MIWD00000PUS rose 0.36% to 704.37, about 0.5% shy of a record closing high hit last week.

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On Wall Street, the Dow Jones Industrial Average .DJI rose 0.91% and the S&P 500 .SPX gained 0.53%. The Nasdaq Composite .IXIC dropped 0.29%.

A slide in high-flying tech and related stocks, including Amazon.com Inc (NASDAQ:AMZN)

Markets in China, Japan and Britain were closed for public holidays, keeping trading volumes thin.

Earnings for S&P 500 companies are expected to rise 46.3% in the first quarter year over year, almost double the rate forecast at the start of April, Refinitiv IBES data show.

Of the 303 companies that have reported so far, 87.1% have beat analyst estimates, or more than 20 percentage points above the long-term average, Refinitiv said.

German retail sales data for March came in far better than expected, underlining that a U.S.-led economic rebound is now gaining traction elsewhere.

But some economists think businesses may be getting ahead of themselves and influenced more by the success and speed of COVID-19 vaccination rollouts.

"The data has been unrealistically strong in recent months - while the underlying economy is performing very well, manufacturing growth is not quite at the stratospheric levels the surveys imply," said UBS economist Paul Donovan.

A busy week for U.S. economic data is expected to show resounding strength, particularly for the ISM manufacturing survey and April payrolls.

Euro zone government bond yields reversed earlier gains to track U.S. Treasuries lower on the U.S. manufacturing activity.

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German benchmark 10-year yields fell 0.3 basis points to -0.203%, rising earlier to their highest at -0.162% since March 2020.

The rise in Germany yields accelerated last week when German inflation advanced further above the European Central Bank's target, and U.S. data showed economic growth sped up in the first quarter.

The dollar index =USD fell 0.335%, with the euro EUR= up 0.39% to $1.2065. The Japanese yen strengthened 0.13% versus the greenback at 109.09 per dollar.

Spot gold prices XAU= rose 1.40% to $1,793.42 an ounce.

Cryptocurrency ether scaled a new record high above $3,000 ETH=BTSP as investors bet on increased adoption. Its 2021 gain of 325% has eclipsed that of bigger rival bitcoin BTC=BTSP . rose more than 1% as Chinese economic figures and U.S. vaccination rate pointed to a strong rebound in demand in the world's two largest economies.

Brent crude futures LCOc1 settled up 80 cents at $67.56 a barrel. U.S. crude futures CLc1 rose 91 cents to settle at $64.49 a barrel.

U.S. gold futures GCv1 settled 1.4% higher at $1,791.80 an ounce.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Emerging markets

http://tmsnrt.rs/2ihRugV Global asset performance

http://tmsnrt.rs/2yaDPgn Ethereum hits record high, quadruples in value in 2021

https://tmsnrt.rs/3398mwf

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