Breaking News

GLOBAL MARKETS-Stocks ride high as 'risk-on' reigns supreme

Stock MarketsFeb 13, 2019 00:40
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. GLOBAL MARKETS-Stocks ride high as 'risk-on' reigns supreme

* Graphic: World FX rates in 2019

* World stock index rises 0.3 pct, Nikkei up 2.6 pct

* European stocks open higher, Dax leads, FTSE near 4 month high

* U.S. futures up on tentative deal to avert govt shutdown

* Dollar holds at 2 month high, bond yields inch upwards

* Asian stock markets:

By Marc Jones

LONDON, Feb 12 (Reuters) - World shares and bond yields rode a renewed surge in risk appetite on Tuesday as investors turned optimistic about U.S.-China trade talks and cheered Washington's deal to avoid another government shutdown.

Tokyo's Nikkei set the tone with its best day of the year so far .T and, as Europe's traders hauled the STOXX 600 .STOXX back towards two-month highs set last week, it was little surprise to see Wall Street futures pointing higher. .EU .N

Germany's DAX .GDAXI jumped as much as 1.3 percent and Paris and Milan were both up 1 percent, though London's FTSE .FTSE lagged amid UK PLC's ongoing Brexit uncertainty. .EU .L

The other big focus was the dollar, which hovered at a two-month high having just scored its longest winning streak - eight days straight - in two years. /FRX

"We have had two bits of relatively good news overnight - optimism about the U.S. shutdown not resuming and optimism about a trade deal," said Societe Generale (PA:SOGN) strategist Kit Juckes.

"Equities are higher, bond yields are a little bit higher, yen and Swiss franc weakest of the major currencies, so it's sort of risk-on rules OK!"

Another risk-sensitive currency the Australian dollar also gained and as well as the Japanese yen and Swiss franc, U.S. Treasuries and German Bunds, which are also traditional safety-plays, also sold off. GVD/EUR

Juckes said he reckoned there was now a 75 percent chance that a ratcheting up of U.S. tariffs on Chinese goods will now be avoided and a 95 percent chance that another U.S. government shutdown will be averted.

Those odds got a boost after U.S. lawmakers reached a tentative deal on border security funding, though aides did caution that it did not contain the $5.7 billion President Donald Trump wants to build a wall on the Mexican border. and Chinese officials had also expressed hopes that the new round of talks, which began in Beijing on Monday, would bring them closer to easing their near year-long trade war. and Washington are trying to hammer out a deal before a March 1 deadline, without which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

"There will be no winner in a trade war. So at some point they will likely strike a deal," said Mutsumi Kagawa, chief global strategist at Rakuten Securities in Tokyo.


Underscoring the dramatic turn this year, Bank of America (NYSE:BAC) said emerging markets - which in 2018 suffered one of their worst years on record - were now the most "crowded trade" among its clients with $625 billion of asset-buying firepower. 500 e-mini futures ESc1 , meanwhile, were up after a mixed Monday, with trade-sensitive industrial bellwethers, Boeing (NYSE:BA) BA.N and Caterpillar (NYSE:CAT) CAT.N and some major chipmakers all up in pre-market moves. .N

Most of Asia had nudged higher overnight but it was Japan's Nikkei .N225 that caught the eye as its scored its best day of the year so far with a 2.6 percent surge, having started the day at a one-month low.

With the yen backtracking, shares of exporters such as automakers and machinery makers had led the charge. Separately, Deutsche Bank (DE:DBKGn) noted it was also 20 years since Japan cut interest rates to zero, something now standard in large parts of Europe. .T

The yen's weakness came as the dollar consolidated its longest unbroken rally in two years against a basket of six major currencies. .DXY

The dollar popped up to a six-week high of 110.65 yen JPY= . In contrast, the euro dropped to as low as $1.1267, its weakest in 2-1/2 months, and last traded at $1.12790 EUR= .

Even Klaas Knot, one of the ECB's arch hawks, was suddenly sounding cautious about the central bank ending almost a decade of heavy euro zone stimulus. "At this moment a wait-and-see attitude is probably the optimal attitude," Knot said in an interview with the Financial Times. the Federal Reserve's dovish turn dented the dollar earlier this month, analysts also note the U.S. currency still has the highest yield among major FX peers and that the Fed continues to shrink its balance sheet.

"It has been particular strong as of late again because of the decoupling between the U.S. and the rest of world if you look at (economic) surprise indicators," Andrey Kuznetsov, a bond portfolio manager at Hermes Investment Management, said.

In commodity markets, oil prices also jumped up as traders weighed support from OPEC-led supply restraint and a slowdown in the global economy.

U.S. crude futures CLc1 traded at $53.64 per barrel, up $1.42. Brent crude LCOc1 rose $1.20 percent to $62.89 per barrel. Gold was a touch stronger too at $1,314 an ounce. GOL/

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Citi Economic Surprise Index


GLOBAL MARKETS-Stocks ride high as 'risk-on' reigns supreme

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email