On Monday, global shares rose, but the dollar fell to four-month lows versus key currencies as investors awaited the release of imminent U.S. inflation data for clues on monetary policy.
Market traders were anticipating the release of US personal consumption data on Thursday, the Federal Reserve’s preferred inflation indicator, as well as the possibility of asset purchases being tapered in the face of solid economic data.
The yield on the benchmark 10-year US Treasury fell to one-week lows, as gold gained ground as a safe haven asset.
“The market is taking a deep breath and is coming to terms with inflation,” said Thomas Hayes, managing member at Great Hill Capital in New York.
The MSCI world equity index increased by 0.77 percent to 706.96 points. The FTSEurofirst 300 index in Europe gained 0.10 percent to end at 1,715.51, with technology firms contributing to the index’s near-record highs.
In afternoon trade on Wall Street, the Dow Jones Industrial Average jumped 0.65% to 34,429.56, the S&P 500 jumped 1.14 percent to 4,203.23, and the Nasdaq Composite increased 1.57 percent to 13,682.07.
In lethargic trade overnight in Asia, MSCI’s broadest index of Asia-Pacific equities outside Japan fell 0.1 percent. The Nikkei in Japan gained 0.2 percent, while Chinese blue chips gained 0.4 percent.
Emerging market stocks dropped 0.2 percent on Sunday after Belarusian authorities forced an airplane to land and detained an opposition-minded journalist on board, sparking outrage from Europe and the US.
Following the impressive increase seen in Friday’s worldwide services sector surveys, all eyes will be on personal consumption and inflation statistics in the United States this week.
A strong core inflation number would raise red flags and reignite discussion of a US Federal Reserve rate cut sooner rather than later.
“The market was afraid that the Fed will get behind the curve with tapering but that doesn’t seem to be the case with commodity prices stabilizing,” Hayes said.
In afternoon trading in New York, the dollar index hovered around 90, down 0.2 percent on the day and just above a four-month low of 89.646 set on Friday.
The 10-year Treasury yield in the United States decreased to 1.6046 percent from 1.632 percent late Friday.
Oil prices rose after Iran and the United Nations’ nuclear watchdog agreed to extend a recently expired monitoring agreement for another month, avoiding a breakdown that might have thrown larger discussions on restoring the 2015 Iran nuclear deal into disarray.
The price of Brent oil futures increased by $2.9 to $68.39 a barrel. Crude oil futures in the United States rose $2.34 to $65.92 a barrel.
At 1:42 p.m. ET, spot gold was up 0.1 percent to $1,882.83 per ounce.
On Monday, digital currencies recovered some of the ground lost after a weekend sell-off spurred by fresh signals of a Chinese crackdown on the developing market.
Bitcoin was last up 7% to almost $37,600, reversing losses of 7.5 percent the day before. Ether, the second-largest cryptocurrency, was up over 19% to $2,491 after falling more than 8% on Sunday to almost a two-month low.