Global stocks and the dollar rebounded yesterday from losses a day earlier, buoyed by a surprising rise in Chinese producer prices and strong US economic data that bolstered expectations the Federal Reserve would raise interest rates in December.
The dollar was on track for its largest weekly increase in more than three months, with rebounding US retail sales and a broad rise in producer prices last month indicating the economy regained momentum in the third quarter after a lackluster first-half.
US producer prices rose in September to record their biggest year-on-year rise since December 2014, while retail sales gained 0.6 per cent after a 0.2 per cent decline in August.
The dollar index, which tracks the greenback against a basket of six major currencies, added 0.4 per cent to 97.862 and was up 1.3 per cent for the week.
In China, September producer prices unexpectedly rose for the first time in nearly five years and consumer inflation also beat expectations, easing some concerns about the health of the world’s second-biggest economy.
Disappointing Chinese trade data on Thursday had rattled investors and pushed global equity markets down to three-month lows.
European shares tracked Asian markets higher and Wall Street jumped as better-than-expected results from JPMorgan and Citigroup lifted financial stocks.
Shares of JPMorgan, the biggest US bank by assets, rose 0.77 per cent after it beat forecasts for revenue and profit. Citigroup rose 1.18 per cent after earnings fell less than expected.
In Europe, the pan-regional FTSEurofirst 300 index rose 1.55 per cent to 1,344.44, while MSCI’s all-country world index of equity markets in 46 countries rose 0.77 per cent.
The Dow Jones industrial average rose 141.07 points, or 0.78 per cent, to 18,240.01. The S&P 500 gained 14.08 points, or 0.66 per cent, to 2,146.63 and the Nasdaq Composite added 37.96 points, or 0.73 per cent, to 5,251.29.
Oil slipped below $52 a barrel, giving up earlier gains, as abundant crude supplies outweighed tighter US fuel inventories and plans by the Organisation of the Petroleum Exporting Countries to cut output.
Global benchmark Brent was down 23 cents at $51.80 a barrel. US crude slide eight cents to $50.36 a barrel.
The gain in Chinese producer prices helped lift US Treasury yields, with the benchmark 10-year note down 8/32 in price to yield 1.7659 per cent.
Rising US Treasury yields, on the growing perception that the US Federal Reserve will raise interest rates in December, pushed euro zone government bond yields higher.
The dollar rose 0.63 per cent to 104.31 yen, while the euro fell 0.45 per cent to $1.1006.