China's comforting data set Wall Street records within reach of Reuters



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© Reuters. The offices of the London Stock Exchange Group are seen in the city of London, in Great Britain

Marc Jones

LONDON (Reuters) – Wall Street's main markets were eyeing a return to record highs on Wednesday as a series of Chinese data surpassed expectations, easing worries about the health of its economy.

Although Europe struggled to participate, the MSCI's 47-country index was at a six-month high, benchmark bond yields dragged on, and the dollar, which tends to be highly sensitive to China's fate, the same.

With Wall Street also waiting for results of the likes of Morgan Stanley (NYSE :), the German and the German advanced, although London has suffered a nearly 5 percent drop in iron ore prices hitting its miners. ()

Movements in Asian stock markets were also modest, in part because they had already recovered since the beginning of the year. Global stocks have risen 20% since the end of December.

Japan closed up 0.25 percent after hitting a five-month high, while the index rose 0.3 percent from March 21, 2018 after jumping 2.4 percent on Tuesday -market.

Investors have had the best news from China and were not disappointed with the forecast for first quarter economic growth of 6.4%.

It is important to note that industrial production rose 8.5 percent in March from the previous year, the fastest pace since July 2014 and well above the forecasts of an increase of 5.9 percent. Retail sales were also satisfied with an increase of 8.7%.

Investors reacted by buying the Australian dollar, often a net proxy for China, which rose 0.3 percent to a two-month high at $ 0.7206.

Allianz (DE) Global Investors strategist and portfolio manager Neil Dwane said the data was good enough to allay fears that China's economy was collapsing, although the rest of the year remains in question.

"Beijing will now be on standby to see if it's done enough," Dwane said. "To be optimistic (with stock) from here, you would have to believe in a fairly strong global recovery in the second half … We're a bit more laid back."

Still, the fact that at least some green shoots appeared in the world economy has raised the profitability of government bonds. German Bund yields have hit a four-week high, though at 0.1 percent they are still just above zero.

In foreign exchange markets, the US dollar was finally able to surpass the yen's resistance at 112.13, reaching the highest level since December at 112.16.

Against a basket of major currencies, the dollar was slightly weaker at 96,908, but still within the range of 95.00 to 97.70 which has remained in the last six months.

The euro rose one-touch to $ 1.1315, recovering from losses generated by a Reuters report that several European Central Bank (ECB) policymakers feel the bank's economic projections are too bullish.

JUVENTUS THUMPED

One currency on the move was the New Zealand dollar, which fell to $ 0.6666, after annual consumer price inflation was well below expectations at just 1.5% in the first quarter.

Chinese data improved its workforce by $ 0.6744 but interest on two-year bonds has already risen 9 basis points to 1.48 percent as investors bet the New Zealand Central Bank (RBNZ) would have to reduce rates.

In commodity markets, the overall improvement in risk sentiment has dropped to the lowest level of the year so far. It was the last high of 0.2 percent at $ 1,279.25 per ounce.

Oil prices rose again as fighting in Libya and Venezuelan and Iranian exports raised concerns about tightening global supply.

was the latest high of 48 cents to $ 64.53 a barrel, while futures rose 34 cents to $ 72.06.

The big engine, however, was the future of Dalian iron ore in China that sank after Brazilian miner Vale SA announced it was preparing to resume operations at its huge Brucutu mine in the coming days.

The mine, with an annual capacity of 30 million tonnes, has been closed since early February, after a tailings dam erupted in late January, killing hundreds of people.

Most traded iron ore futures for September delivery on the Dalian commodity exchange sank to 4.7 and closed down 3.8 percent to 621 yuan ($ 92.86).

There was also football drama.

Shares of Italian football giant Juventus had to be lifted as they tumbled more than 20 percent after the team was knocked out of the Champions League by Ajax. The shares of the Dutch club, on the other hand, celebrated with a jump of 8.5 percent.

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