World shares crept up yesterday with a boost from housing sectors while the dollar lost ground as investors awaited further clues on whether the Federal Reserve will raise US interest rates this year.
Wall Street opened higher for the first time in three days, and the Nasdaq hit a record intraday high, with the overall gain in US stocks led by technology and housing. Materials also rose nearly one per cent.
Housing stocks jumped up by at least 1.75 per cent after the Commerce Department reported new US single-family home sales soared unexpectedly to near nine-year highs in July.
The housing data helped traders fill the gap as markets await an annual gathering of global central bankers and a speech by Fed Chair Janet Yellen on Friday in the mountains of Wyoming.
“The big surprise [at Jackson Hole] would be a hawkish shift from Yellen which would be enough to rock the boat on risk and send US rates and the dollar sharply higher,” said Brad Bechtel, managing director at Jefferies in New York.
“But I doubt she wants to do this and would prefer a relatively mixed view that has elements of hawkishness and dovishness and ultimately results in a December tightening, but a dovish December tightening.”
The Dow Jones industrial average rose 43.76 points, or 0.24 per cent, to 18,573.18, the S&P 500 gained 8.34 points, or 0.38 per cent, to 2,190.98 and the Nasdaq Composite added 25.05 points, or 0.48 per cent, to 5,269.65.
The bump in new home sales helped the US dollar trim losses, though the greenback was still down 0.11 per cent to 94.42 against a basket of major currencies.
The euro firmed to $1.1321 as one major bank decided the news had been good enough that the European Central Bank will not need to cut its interest rates any deeper into negative territory, as it had previously expected.
European equities rose 1.02 per cent, led by mining stocks, after data pointed to continuing gradual improvement in the region’s economy. Homebuilders there also saw a bounce following a solid update from Persimmon.
Surprisingly upbeat French PMI figures showed the private sector growing at its fastest in 10 months, while in Britain export orders hit a two-year high to confound Brexit doom-mongering.
New Zealand’s dollar, meanwhile, was up 0.66 per cent at $0.7316 after the country’s central bank forecast another 35 basis points in possible rate cuts, less than many investors had wagered on.
“The [US] dollar is weakening ... due to the general anticipation around Jackson Hole on Friday,” said Saxo bank’s head of FX strategy John Hardy.
Oil prices jumped as much as two per cent, reversing earlier losses, after Reuters reported that Iran was sending positive signals that it may support joint Opec action to prop up the market.
Brent crude was up 87 cents, or 1.8 per cent, at $50.03 a barrel by 11.02am EDT (1502 GMT).
It had fallen 1.4 per cent earlier to $48.48.
US crude jumped 70 cents, or 1.4 per cent, to $48.11.