World shares returned to a record high yesterday, on relief that hurricane Irma looked to be losing strength in the United States and that North Korea’s anniversary celebrations at the weekend passed without any new missile test.
MSCI All Country World Index, which tracks roughly 2,400 stocks in 47 countries, climbed to its latest peak as Europe’s insurers rose more than two per cent on hopes Irma’s damage would not prove as costly as feared.
Wall Street’s main markets were expected to gain around 0.5 per cent yesterday, having lost ground last week as the storm approached.
The relief over North Korea and a weaker yen had also given Tokyo its best session since June in Asia, as investors began to lose their appetite for safer assets like gold and US Treasuries.
Winning a reprieve from risk aversion, the dollar registered its biggest gains in the currency markets in 10 days. It added 0.5 per cent against its perceived safe-haven counterpart, the Japanese yen, and regained ground against the high-flying euro.
The sense of relief lifted E-Mini futures for the S&P 500 by 0.5 per cent, while yields on 10-year Treasury notes rose three basis points to 2.09 per cent, after barely budging in European trading.
South Korea’s main index added 0.8 per cent, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.4 per cent.
The dollar hovered at 108.50 yen, up from Friday’s 10-month trough of 107.32. Against a basket of currencies, it added 0.15 per cent to 91.490, still close to last week’s 2½-year low of 91.011.
The euro eased to $1.2020, having hit a top of $1.2092 on Friday amid speculation the European Central Bank was closer to starting a wind-back of its stimulus programme.
China’s central bank was also a focus in Asia after it confirmed reports that it planned to scrap reserve requirements for financial institutions settling foreign exchange forward yuan positions with effect from yesterday.
The dollar was up 0.3 per cent against the offshore yuan at 6.5269 yuan, off a low of 6.4437.
There were also reports Beijing was planning to shut down local crypto-currency exchanges, dealing a blow to bitcoin’s recent rally.
Bitcoin was quoted at $4,185 on the BitStamp platform, off a recent record high of nearly $5,000.
In commodity markets, gold slipped 0.7 per cent to $1,337.81 an ounce, away from a one-year peak of $1,357.54.
Oil prices regained ground after the Saudi oil minister discussed the possibility of extending a pact to cut global oil supplies beyond March 2018 with his Venezuelan and Kazakh counterparts.
The news of the talks on Sunday helped offset the downward pressure on oil prices amid worries that energy demand would be hit hard by Hurricane Irma.
United States crude was trading 20 cents firmer at $47.68 a barrel, while Brent slipped 24 cents to $53.50.