Major US stock indices started the session with gains as high-rises continued their recent rally.
The Dow Jones Industrial Average was up 296.97 points, or 0.84 percent, at 35,759.75, the S&P 500 was up 53.4 points, or 1.18 percent, at 4,574.94, and the Nasdaq Composite was up 195.32 points, or 1.38 percent, at 14,389.77 at 10:40 a.m. EST. 1540 GMT).
The pan-European STOXX 600 climbed 1.8%, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.8% to a two-week high and blue-chip Nikkei closed up more than 1%.
Investors took comfort in the headlines of positive news in recent days, suggesting that tensions between the West and Russia over Ukraine may ease and a string of upbeat earnings lifted sentiment towards riskier assets.
French President Emmanuel Macron, who met with Russian President Vladimir Putin on Monday, said on Tuesday that he believes steps can be taken to ease the crisis in which Russia has increased the number of troops near Ukraine. has extended, but says it does not plan to attack.
On the earnings front, French fund manager Amundi posted strong earnings growth on Wednesday, British drugmaker GSK’s quarterly results beat forecasts and Dutch bank ABN AMRO reported higher-than-expected net profit of 552 million euros for the fourth quarter. Reported.
“The past few days have seen positive headlines on Russia/Ukraine with reports of talks between Macron and Putin and German efforts to defuse the crisis,” said Mohit Kumar, Jefferies’ managing director of interest rates strategy.
“But we maintain our view that a major concern for riskier assets is the removal of central bank housing as markets become accustomed to abundant liquidity and low rates over long periods of time.”
Major central banks have become tighter than anticipated inflation, sending bond yields higher.
The European Central Bank could raise rates this year, Bundesbank’s new president Joachim Nagel said in a newspaper interview.
Barring any major surprises, Thursday’s US consumer price index should meanwhile cement expectations that the Federal Reserve will raise rates next month, with a stronger print offering further support for a larger increase of 50 basis points.
Japan’s 10-year bond yield retreated from the session’s peak of 0.215%, the highest since January 2016. But after a sharp sell-off, broader bond markets stabilized with prices rising and yields falling.
The US two-year Treasury yield has reached its highest level since February 2020. [US/]
“Our economists expect the Fed to hike five times this year, three times in 2023 and twice in 2024,” Goldman Sachs said in a research note.
“We have revised our US Treasury yield forecasts to take into account the economic background and the sharp turn of the Fed. We now see that 10y UST yields are 2.25% this year (up from 2% previously), and 2.45% next year (up from 2% earlier). above).
Germany’s 10-year Bund yield was down 0.23% on the day.
Danske Bank chief strategist Piet Hans Christiansen said, “I rarely use an overdone move in the markets, but I would say the move is overdone in bonds. The momentum has been so strong since Thursday, because of a correction. Was.” “We still have US CPI tomorrow, so let’s see what happens after that.”
The ECB’s harsh stance last week has left Bund yields on track for the biggest monthly increase in a year.
Rising borrowing costs and signs of a normalization of rates in Europe have boosted bank stocks – a sub-index of European banking stocks – at their highest level since 2018, up sharply since Thursday’s ECB meeting.
In the currency markets, the dollar index lost ground against six peers, trading down 0.14%.
The euro was up 0.21 percent at $1.1438, steadfast from a three-week high, after European Central Bank President Christine Lagarde raised bets for aggressive interest rate hikes.
The yen was down 0.10 percent at $115.4,300.
Oil prices stabilized at around $90 a barrel as prices continued to remain under pressure due to increased supplies from Iran and the United States.
Brent crude was up $1.18, or 1.3 per cent, at $91.96 a barrel. US crude was last up $1.09, or 1.22 percent, at $90.45 a barrel.
Gold prices rose on Wednesday ahead of US inflation data on lower US Treasury yields and a weaker dollar. Spot gold rose $2.6151, or 0.14 percent, to $1,828.10 an ounce.
This story has been published without modification in text from a wire agency feed.
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