Global stocks eye first weekly gain in eight weeks, dollar hits one-month low By Reuters

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© Reuters. A man wearing a protective face mask, amid the coronavirus disease (COVID-19) pandemic, walks past a screen showing the Shanghai Composite Index, the Nikkei Index and the Dow Jones Industrial Average outside a brokerage in Tokyo, Japan, February 14, 2022. REUTERS/ Kim

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By Carolyn Cohn and Stella Qiu

LONDON/BEIJING (Reuters) – Global stocks were heading for their first weekly gain in eight weeks on Friday on a more bullish view of earnings as the dollar hit a one-month low after Federal Reserve minutes suggested that it could curb rapid rate hikes later this year.

Upbeat U.S. earnings outlook overnight for department store operator Macy’s Inc (NYSE:) and discount chains Dollar General Corp. (NYSE:) and Dollar Tree (NASDAQ:) drove stocks higher.

The Fed’s May meeting minutes released Wednesday confirmed two more hikes of 50 basis points each in June and July, but policymakers also hinted at the possibility of a pause later in the year.

“It’s all taken from the FOMC (Federal Open Market Committee) minutes,” said Giles Coghlan, chief currency analyst at HYCM.

“Investors were relieved that there was no 75 basis point index.”

Markets would focus on April’s core PCE price index for the United States, due later Friday for further signs of whether inflation was on the rise, Coghlan added.

The MSCI Global Equity Index rose 0.38%. It was heading for a 3.2% rise on the week and a recovery of almost 6% from the 18-month lows set two weeks ago.

were flat after Thursday’s 1.61% rise, 1.99% gain and 2.68% jump.

European stocks hit a 10-day high and rose 0.18%. fell 0.23%, from the previous day’s three-week highs.

Hong Kong shares rose 2.7% after better-than-expected revenue growth in the first quarter of Ali Baba (NYSE:) and Baidu (NASDAQ:). Asian equities also benefited from hopes of stabilizing US-China relations and more stimulus from the Chinese government.

The United States would not prevent China from developing its economy, but wanted it to adhere to international rules, Secretary of State Antony Blinken said Thursday in remarks that some investors interpreted as positive for bilateral relations.

rose 0.7%, Chinese mainland blue chips rose 0.2% and the resource-rich Australian index climbed 1.1%.

The swing in sentiment drove the dollar to a one-month low against a currency index, down 3.2% from 20-year highs hit earlier this month. The euro hit a one-month high and appreciated 0.11%.

Oil prices remained near a two-month high, with on track for their biggest weekly jump in 1.5 months, buoyed by the prospect of an EU ban on Russian oil and the upcoming summer driving season in the United States.

edged up 0.08% to $114.20 a barrel. Brent rose 0.28% to $117.73 a barrel. [O/R]

The benchmark’s return fell to 2.7468%. It had hit a three-year high of 3.2030% earlier this month on fears that rapid Fed hikes could undermine long-term growth.

The two-year yield, which is rising on traders’ expectations of a hike in the fed funds rate, softened to 2.4678% from a close of 2.4888%.

“Overall, a pronounced stress decompression,” ING analysts said in a note.

German 10-year bond yields eased to 0.982%.

rose 0.43% to $1,857.79 an ounce. [GOL/]

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