World shares hit their latest in a run of record highs yesterday, while the dollar was at it strongest in 1-1/2 months as encouraging US data lifted it in tandem with global bond yields.

MSCI’s 47-country All-World index, which contains more than 2,400 firms, was pushed to its peak by a fractional move up by Europe’s main bourses and as Wall Street prepared to reopen at an all-time top.

It was the MSCI benchmark’s tenth record high since late July, extending the year’s blizzard of records to more than 40 and with no sign it is about to run out of steam. SEB investment management’s global head of asset allocation Hans Peterson pointed to stronger economic and trade data and signs that firms in large economies were finally increasing investment spending.

“It will take over from the consumption cycle and means the (global business growth) cycle will be longer than consensus. So I think that is the mechanism that is driving equities at the moment.”

“So we are long equities, we are long emerging markets and we are long Europe. We are risk-on.”

Currency and bond markets were also flashing similar signals, especially as the ‘Trumpflation’ trade, which looked to be disappearing a few months ago, was back in force.

The dollar climbed as high as 93.920 against a broad basket of other top currencies before traders peeled away. That was its highest level since August 17 and came as a firming view that the Federal Reserve will raise interest rate for a third time this year in December kept two-year US government bond yields hovering at a nine-year high.

Borrowing costs across the euro zone nudged higher too.

With the exception of Greece, southern European bonds continued to underperform as political tensions plagued Spain after Sunday’s independence vote in Catalonia was marred by police violence.

That also kept the squeeze on the euro. It dipped 0.2 per cent to $1.1709 before recovering to 1.1750 as the first US deals were being punched.

The euro was partially supported by large option expiries worth about $4 billion between the $1.1750 to $1.18 levels yesterday.

The dollar was up 0.2 per cent against the yen at 113.05 yen within reach of last week’s two-month high of 113.26 yen.

There was plenty of movement in commodity markets too.

Crude oil futures extended losses after tumbling on Monday, as a rise in US, drilling and higher Opec output, put the brakes on their recent rally and rekindled concerns about oversupply.

Brent crude slipped 0.4 per cent to $55.90 a barrel, after marking a third-quarter gain of about 20 per cent. US crude fell 0.3 per cent to $50.42.

Spot gold edged down 0.1 per cent to $1,270.06 per ounce, plumbing its lowest since August 15 as the dollar continued to strengthen.

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