Global Stock Markets

“The U.S. 10 year Treasury yield rose alongside its eurozone peers overnight, while U.S. stocks rallied, reflecting a risk-on attitude among investors,” said Makoto Noji, senior FX/bond strategist at SMBC Nikko Securities. 

The Dow Jones Industrial Average .DJI rose 1.4 percent to 25,146.39, the S&P 500 .SPX gained 0.86 percent to 2,772.35 and the Nasdaq Composite .IXIC added 0.67 percent to hit its record closing high of 7,689.24.

Oil prices rose on Thursday to shake off some of the previous session’s losses, supported by plunging exports from OPEC-member Venezuela.

Brent crude futures LCOc1 last traded at $75.70 a barrel and U.S. West Texas Intermediate (WTI) crude CLc1 at 65.01, each rising 0.5 percent on the day.

Copper CMCU3 hit a five-month high of $7,278.50 per tonne, though the gains was driven more by supply concerns in Chile than by stronger demand.

Gold prices edged higher, with spot gold XAU= last traded at $1,297 per ounce, up 0.1 percent on the day, loosely supported by a weaker dollar amid ongoing concerns about a trade war between the United States and its allies.

India’s central bank raised its policy rate for the first time in more than four years on Wednesday, but surprised some economists by keeping its stance “neutral” instead of changing it to “tighten”.

Market participants, wary of event risk, are monitoring developments ahead of the G7 summit later this week and the U.S.-North Korea summit scheduled for next week.

Stocks rally on boost from strong global growth, earnings

Asian Stock Markets

Asian shares joined a global rally and scaled a fresh decade peak on Wednesday as strong world growth and rising corporate profits lured hordes of investors into equities, while oil prices jumped on expectations of a production cut. 

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.6 percent to Wednesday’s 1.3 percent rise - the biggest gain in eight months, supported by energy and technology sectors.

The index has been on an uptrend most of this year, posting a monthly loss only once in 2017. For the year, it is up about 33 percent so far, on track for its best annual performance since a 68 percent jump in 2009.

Japan's Nikkei .N2256 was up 0.8 percent on Wednesday and South Korea's KOSPI .KS11 climbed 0.4 percent. Australia's benchmark S&P/ASX 200 index inched higher towards critical chart level of 6,000 points.

A strengthening global economy this year has fed an insatiable appetite for equities, with Asia’s trade-dependent nations enjoying robust overseas sales in a boon to corporate earnings.

“Emerging markets are flying and this is where traders are really generating outperformance,” said Chris Weston, Melbourne-based chief markets strategist at IG.

Hong Kong's Hang Seng index .HSI is up 35.5 percent year-to-date while China's CSI 300 .CSI300 has returned 27.4 percent so far in 2017.

On Wall Street, the S&P 500 .SPX and Nasdaq .IXIC advanced to record closing highs on Tuesday, while the Dow .DJI set a new intra-day high.

Investors looking to eke out additional gains before the end of the year flocked to tech stocks, some fund managers said, with Apple Inc (AAPL.O), Google’s Alphabet Inc (GOOGL.O) and Amazon.com (AMZN.O) rallying.

While markets expect the Federal Reserve to hike rates next month, analysts say that is unlikely to dampen equities as financial markets remain accommodative.

The U.S. Treasury yield curve flattened to its lowest in a decade as benign inflation and hunger for yield have supported longer-dated debt. Benchmark 10-year notes US10YT=RR have inched higher to yield 2.3559 percent.

The 2-year Treasury, at 1.77 percent, is at the highest since 2008 US2YT=RR and set to surpass Australia’s 2-year government bond yields AU2YT=RR for the first time since December 2000.

In currencies, the U.S. dollar .DXY was generally on the backfoot against major rivals, falling for a second straight day on the Japanese yen JPY=.

The Australian dollar was steady around $0.7576 AUD=D4, putting a bit of distance between a five-month trough of $0.7532 plumbed overnight on dovish-sounding Reserve Bank of Australia policy meeting minutes.

The euro EUR= trod water at $1.1741, drifting away from a recent one-month peak of $1.1860.

In commodities, oil prices firmed after a reported fall in U.S. crude inventories and on expectations that an OPEC-led production cut aimed at tightening the market will be extended beyond March 2018.

U.S. light crude CLc1 added 83 cents to $57.66 while Brent crude oil LCOc1 climbed 51 to $63.08, not far from a near 2-1/2 year peak of $64.65 touched earlier this month.

Copper futures CMCU3 extended gains for a fourth straight day, while spot gold XAU= was barely changed at $1,280.61.

Asia stocks hit 10-year high on global growth optimism, dollar strong

Asian Stock Markets

Asian stocks rose to a 10-year high on Tuesday as investors took heart from further evidence of strength in the global economy, while the dollar hovered near a one-week high against its peers thanks to higher U.S. yields and a floundering euro. 

European markets were expected to be somewhat more subdued in early trade, with financial spreadbetters expecting Britain's FTSE .FTSE to open 0.05 percent higher and Germany's DAX .GDAXI and France's CAC .FCHI to open unchanged.

Gains on Wall Street overnight helped MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rise 0.8 percent to a fresh decade-high.

Japan's Nikkei .N225 advanced 0.7 percent, while South Korea's KOSPI .KS11 rose 0.1 percent and 

Australian stocks climbed 0.3 percent. Shanghai .SSEC added 0.5 percent and Hong Kong's Hang Seng .HSI was 1.3 percent higher.

Equity markets have enjoyed strong support this year thanks to rising corporate earnings on the back of an improving global economy.

That confidence was again on display overnight, with upbeat data in Germany helping the benchmark DAX .GDAXI brush off worries over the collapse of German coalition government talks.

German data showed strong industrial activity, while the Conference Board’s leading economic index for the United States rose 1.2 percent in October, double the rate economists polled by Reuters had expected.

Wall Street was led up by telecom and tech shares, with the Dow .DJI edging back towards record highs scaled two weeks ago. [.N]

In currencies, the dollar index against a basket of six major currencies stood near a one-week peak of 94.104 .DXY touched overnight. The greenback was boosted by rising bond yields, with the two-year U.S. Treasury yield US2YT=RR touching a nine-year high of 1.755 percent overnight.

The yield has risen as investors priced in more interest rate hikes by the Federal Reserve, while the Treasury is expected to increase debt issuance with a focus on short- and intermediate-dated maturities.

The dollar was also lifted as the euro has been weakened by political risks arising from German Chancellor Angela Merkel’s failure to form a three-way coalition government, thrusting Europe’s biggest economy into a political crisis.

Merkel, whose conservatives were weakened after they won an election in September with a reduced number of seats, said she would inform the German president that she could not form a coalition, after the pro-business Free Democrats withdrew from negotiations.

The euro inched up 0.1 percent to $1.1745 EUR= but remained near a six-day low of $1.1722 touched on Monday. A week ago, the common currency had rallied to a one-month high of $1.1862 on robust German growth data.

The dollar was steady at 112.545 yen JPY=, having bounced from a one-month low of 111.890 set overnight.

The Australian and New Zealand dollars were both slightly lower at $0.7543 AUD=D4 and $0.6804 NZD=D4, respectively.

Oil prices were little changed as expectations of an extended OPEC-led production cut were cancelled out by rising U.S. output.

Brent crude futures LCOc1 were at $62.30 per barrel, 8 cents above their last close. U.S. crude CLc1 were 3 cents higher at $56.45 per barrel.

Spot gold XAU= crawled up 0.25 percent to $1,279.76 per ounce after sliding more than 1 percent overnight on the dollar’s bounce.