World shares hit their fourth all-time high in less than a month yesterday but a rally in bonds was halted by fresh speculation that the European Central Bank (ECB) will soon start winding down its two trillion euro money printing programme.

For most of the day the mood had been one of relief that US Federal Reserve Chair Janet Yellen had not sounded more hawkish in her appearance before Congress the previous day, a green light for risk-taking.

Wall Street started steadily after another record peak for the Dow Jones Industrial Average while the dollar steadied just off a nine-month low just in time for day two of Yellen’s semi-annual Washington grilling.

But bond markets were in the red again after the Wall Street Journal reported that the ECB is likely to signal in September that its asset purchase programme will be gradually wound down next year.

Yields on US Treasuries, which move inversely to prices, crept higher and Germany’s benchmark 10-year bond yield gave up all of its early falls to move back above 0.50 per cent.

Currency markets churned too. The euro climbed to $1.1415 from as low as $1.1370, hit after earlier ECB policymaker talk of extending stimulus. It had been as high as $1.1489 in Asia after Yellen side-swiped the dollar.

Equities were also underpinned by the overnight drop in bond yields as Yellen sounded cautious on inflation. Indeed, markets doubt even that modest Fed tightening will ensue and imply only a 50-50 chance of a interest rate rise by December.

Treasuries had rallied in reaction, with yields on two-year notes falling to three-week lows before the ECB talk turned markets around.

Up until that point the odd one out had been Canada, where yields hit their highest since late 2013 after the Bank of Canada raised rates by quarter of a point, saying the economy no longer needed as much stimulus.

The Canadian dollar notched its biggest percentage gain since March 2016 and was last trading near one-year peaks at C$1.2726. The Aussie and Kiwi dollars jetted higher too.

The main loser was the US dollar which slipped as far as 112.86 on the yen before recovering back to 113.32.

The moves in United States yields benefited gold, which pays no interest, and pushed the precious metal up 0.3 per cent to $1,223.16 and away from its recent trough of $1,204.45.

Oil prices flatlined as producer club Opec said it expected demand to decline next year as rivals pump more, though the Chinese trade data showed it remained a heavy buyer.

Brent crude futures were up 10 cents at $47.85 a barrel, while United States crude added 18 cents to $45.68.