🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

GLOBAL MARKETS-Stocks sizzle at 2-month high before Trump State of the Union address

Published 06/02/2019, 12:57 am
Updated 06/02/2019, 01:00 am
GLOBAL MARKETS-Stocks sizzle at 2-month high before Trump State of the Union address
EUR/USD
-
AUD/USD
-
UK100
-
US500
-
DJI
-
AXJO
-
JP225
-
BAC
-
BP
-
AXFJ
-
VIX
-
VIX
-
MIWD00000PUS
-
DXY
-
SXEP
-
SPLRCI
-
SPLRCT
-

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* World shares extend two-month highs as miners, banks make ground

* Iron ore at near 2-year high after Brazil orders dam closures

* Dollar waits for Trump State of Union Address

* Aussie dollar gains as central bank stays firm with message

* Euro slips on lacklustre economic data

By Marc Jones

LONDON, Feb 5 (Reuters) - World stocks extended their white-hot start to the year on Tuesday, while the dollar was straining for a fourth day of gains as traders awaited U.S. President Donald Trump's State of the Union address.

The U.S. Federal Reserve's recent caution continued to feed risk appetite but there were a number of idiosyncratic factors marching markets higher.

News that oil giant BP BP.L had doubled its profits saw Europe's oil and gas sector .SXEP jump 1.5 percent and propelled London's FTSE .FTSE toward its longest winning streak since April. .L .EU

Wall Street futures .N were pointing up again while miners were strong globally as well after news that Brazil had ordered the world's largest iron ore miner, Vale, to close eight of its dams in the wake of a deadly collapse last month. ore prices surged 14 percent at the end of last week in anticipation of the move and are now at a near two-year high.

"Our fundamental view is there no reason for this incredible move, so is it just speculation, a frenzy about possible stimulus in China?" said Saxo Bank's head of FX Strategy John Hardy. "What should we do with it? I don't know, but it should be noted."

China and large parts of Asia had been closed for Lunar New Year celebrations overnight but the markets that were open made some headway.

Japan's Nikkei average .N225 marked its highest level in seven weeks before fading to finish slightly lower. .T

Australian shares .AXJO suffered no such fatigue. They jumped 2 percent, with long-battered financials .AXFJ surging after a government-appointed misconduct inquiry left the structure of the country's powerful banks in place. Street was still being cheered after technology .SPLRCT and industrials .SPLRCI helped the S&P 500 and Nasdaq break through 100-day moving averages on Monday and sent the VIX .VIX "fear gauge" to a four-month low. .N

Futures had the S&P, Dow and Nasdaq opening 0.2-0.3 percent higher, and with Europe still rallying, MSCI's gauge of stocks across the globe .MIWD00000PUS scaled fresh two-month highs following its best January on record.

In the currency markets, the dollar held on to recent gains against its major peers as investors waited on monthly ISM survey data, having lapped up Friday's strong payrolls number and a manufacturing survey. ECONALLUS

After reining in rate hike expectations last week the Fed took the unusual step of issuing a statement on Monday saying that its head Jerome Powell had told U.S. President Donald Trump and Treasury Secretary Steven Mnuchin that "the path of policy will depend entirely on incoming economic information." dollar's index against six major currencies .DXY was a fraction higher at 95.916, having gained 0.27 percent on Monday, while U.S. Treasury yields were also creeping up again. GVD/EUR

PULL TO PARITY

The euro weakened slightly to $1.1420 EUR= after data showing euro zone business growth almost stalled in January but the bigger moves were elsewhere. /FRX

The Swiss franc looked to be heading for another spell of parity against the dollar EUR=EBS EURCHF=EBS after falling across the board.

Some of its sharpest losses were against high-yielding currencies such as the Australian dollar AUDCHF= , which was lifted to $0.72 AUD=D3 overnight when the central bank sounded less dovish than markets had wagered as it kept interest rates on hold. the dollar/Swiss franc breaking through parity, some stops seem to have triggered in a broadly risk-on market," said Kamal Sharma, director of G10 FX strategy at Bank of America Merrill Lynch (NYSE:BAC).

Traders' attention was already shifting to Trump's delayed State of the Union address, due at 2100 ET Tuesday/0200 GMT Wednesday. told a White House event over the weekend that he might declare a national "emergency" because Democrats in Congress weren't moving toward a deal to provide money to build a wall on the border with Mexico. a step would likely prompt a court challenge from Democrats but there will also be focus on what message Trump sends on issues like the ongoing trade war with China and potentially some other parts of the world.

"If President Trump persists in his long-promised wall along the U.S.-Mexico border in the upcoming address, it would cap the dollar's rally," said Kengo Suzuki, chief FX strategist at Mizuho Securities.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Gains for major world stock markets since the start of the year

https://tmsnrt.rs/2Bjz7kf

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.