World equity markets rose yesterday, lifted after Greece confirmed it will pay a €450 million loan tranche to the International Monetary Fund and on growing expectations the US Federal Reserve will not raise interest rates until the latter part of the year.
European markets also strengthened on German industrial output and trade data, which showed the continent’s largest economy improving in February.
Wall Street edged lower, with focus on next week’s flood of corporate earnings. The dollar strengthened, continuing a recovery from recent weakness. Oil prices rebounded from sharp declines on Wednesday.
The Dow Jones industrial average fell 4.34 points, or 0.02 per cent, to 17,898.17, the S&P 500 gained 0.89 points, or 0.04 per cent, to 2,082.79, and the Nasdaq Composite added 7.02 points, or 0.14 per cent, to 4,957.85.
Europe’s EuroFirst 300 index of leading shares was up one per cent at a seven-year high of 1,627 points.
Britain’s FTSE 100 was up 1.1 per cent at 7,013 points and Germany’s DAX was 0.8 per cent higher at 12,136 points.
“While the risk of a Greek exit remains high, European equities continue to be supported by extremely low core euro area yields which remain at the bottom of recent ranges,” Barclays said in a note yesterday.
The benchmark German 10-year Bund yield fell to a record low of 0.146 per cent. The low European yields fostered optimism for the afternoon’s sale of $13 billion in 30-year US bonds, as Treasuries carry higher yields than in Europe. Overall, Treasury yields rose and prices slipped, after the Labour Department said the four-week average of workers filing for first-time jobless benefits fell to the lowest since 2000.
Recent comments from Federal Reserve officials, including the release of minutes from the Fed’s March policy meeting, suggest the committee will move in a measured fashion. Over the last few weeks, the market has been shifting expectations in favour of a rate increase later in the year.
However, on Wednesday, New York Fed president William Dudley said at a Reuters event that a June interest-rate increase was still possible if the labour market showed sufficient strength.
Currency traders were focused on this more hawkish message. The dollar index was up 0.2 per cent, its fourth consecutive daily rise and its longest winning streak in three months. The euro was down 0.8 per cent on the day at $1.0699 .
Crude oil took back some lost ground following a plunge overnight triggered by a rise in US stocks and news of record Saudi oil production.
US crude was up 1.1 per cent to $50.94 a barrel after shedding nearly seven per cent on Wednesday. Brent rose 1.3 per cent to $56.86.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.7 per cent to its highest since mid-September. That marks nine straight winning sessions, best since September 2013.
Japanese stocks rose 0.75 per cent to a 15-year high, while Hong Kong rose 2.7 per cent to a seven-year peak.