- The European STOXX 600 rose from a six-week low on Tuesday
- The Meta rally raises US stocks
- Dovish BOJ reached a yen to a 20-year low of 131 / dollar
WASHINGTON / LONDON, April 28 (Reuters) – The US dollar reached its highest level since 2002 on Thursday after Wall Street rose and European stocks fell from a six-week low as strong earnings reports offset grim economic data. for the United States.
The yen fell to a 20-year low after the Bank of Japan promised to buy unlimited quantities of 10-year bonds every day to defend its yield target. The bank’s growing commitment to ultra-low interest rates sent the US dollar to a new high, weakened emerging market currencies and pushed US dollar borrowing costs sharply higher in foreign exchange derivatives markets. Read more
Oil prices have risen after reports that Germany is no longer opposed to the Russian oil embargo, which could further strain global supplies.
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Dow Jones Industrial Average (.DJI) rose 604.71 points, or 1.82%, to 33,906.64, S&P 500 (.SPX) rose 103.21 points, or 2.47%, to 4,287.17 and the Nasdaq Composite added 38 points or.IX2. 3.07% to 12,871.76 to 14:29 EST (18:30 GMT).
Shares of technology rose with strong gains driven by rallies on the Meta Platforms (FB.O), which are up nearly 19%.
These gains supported Wall Street even after the US Department of Commerce said in a preliminary estimate of GDP that gross domestic product fell by 1.4% year on year in the last quarter. Read more
“It’s a huge GDP shortfall this morning, but just watching the title is misleading,” said Cliff Hodge, Cornerstone Wealth’s chief investment officer.
“Trade, inventories and government spending dragged on, but consumers held back and business investment was strong. The shift to service costs portends inflation, and the core PCE has come out a little easier. The big title miss also gives the Fed some room to breathe. “
The MSCI World Capital Index (.MIWD00000PUS) rose 12.25 points, or 1.87%, to 666.15.
European stocks won on the basis of solid corporate profits. The pan-European STOXX 600 (.STOXX) closed 0.6%, but was below the session highs, hit by weak data on US economic growth in the first quarter, as well as higher-than-expected German inflation, which boosted betting on more -fast rate of monetary tightening by the European Central Bank.
The indexes in Frankfurt (.GDAXI) and Paris (.FCHI) rose.
London-based Standard Chartered Bank (STAN.L) jumped 13% after optimistic quarterly profits. Its shares, quoted in Hong Kong, previously rose by more than 10%. Read more
“The markets were quite dangerous at the start of the winning season, but Meta’s gains last night seemed to calm the mood,” said Caspar Henze, senior portfolio manager at Bluebay Asset Management in London. “We seem to have turned the corner for US stock prospects, and that should provide some relief to investors watching the dollar rise.”
Earlier, the broadest index of Asia-Pacific shares of MSCI outside Japan (.MIAPJ0000PUS) rose 0.93%.
BoJ’s move contrasted sharply with investors’ belief that US interest rates were about to rise rapidly, shaking the dollar higher.
“The message from the monetary policy statement this morning is that the Central Bank of Japan is refusing to back down, sticking to its plan to buy unlimited bonds indefinitely to defend the 10-year yield target of 0.25%,” said Arne Petimesas. , senior analyst at AFS Group.
The euro hit a five-year low against the dollar at $ 1.04695 before cutting losses. He was still on his way to his worst monthly performance since January 2015.
The fall of the euro to its lowest level since 2017 re-ignites the possibility of it reaching parity against the dollar for the first time in two decades, as fears of a recession in the eurozone encourage investors to accumulate bear bets. Read more
The weaker yen and the euro raised the dollar index to 103,930, its highest level since December 2002.
Euro / dollar at 5-year lows, dollar / yen at 2-year highs
Japan’s Nikkei (.N225) rose 1.75%, its best day of two weeks, as investors welcomed the weaker currency, which is helping Japanese exporters. Japanese government bonds showed their best rise in a month.
US government bonds rose after signs of strength in the US labor market exceeded the expected decline in economic growth in the first quarter.
Investors expect US interest rates to rise and that the Federal Reserve meeting next week will lead to the first of several consecutive increases of 50 basis points.
Oil prices rose, with crude Brent futures up 1.65% and US crude oil up 2.85%.
German officials in the European Union are no longer objecting to the full Russian oil embargo, as long as Berlin has time to secure alternative supplies, the Wall Street Journal reported on Thursday. Germany has relied heavily on Russian energy imports and has previously opposed a total ban.
Spot gold prices rose after a ten-week low reached earlier in the session under pressure from the stronger US dollar.
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Report by Chris Prentiss in Washington, DC, Wilson, Samuel Indick and Saikat Chatterjee in London and Tom Westbrook in Singapore; Edited by Kim Kogil, Tomasz Janowski and David Evans
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