MSCI’s world stock index gains, while European and US debt rises sharply. European bonds are on the rise.
The World stocks rise this Friday as a reflection that inflation data from the euro zone is better than expected. That boosts government bonds as well. Both asset classes are bracing for their worst quarter in a year in response to central banks’ promise to keep interest rates high.
He MSCI world equity index thus gains 0.4%, while European and US debt rises sharply to reflect the readjustment of markets’ bets on rates. Meanwhile, MSCI’s measure of Asian stocks excluding Japan rose 1.2%, with Chinese markets closed for a holiday.
The data showed that headline inflation in the euro zone accelerated 4.3% year-on-year in September, below economists’ forecasts for a 4.5% rise and its slowest pace in two years.
He return on two-year German bonds, which follows rate expectations and falls as the price of debt risesdrops 7 basis points (bp), to 3.23%, while that of 10-year notes, considered the benchmark for euro zone debt, loses 12 bp, to 2.848%, on its way to its best session in more than a month.
USA
On the other side of the Atlantic, the yield on 10-year US Treasury bonds fell 6 bp, to 4.6%. These figures put an end to a torrid quarter for public debt, with a rise of 45 bp in the return of German 10-year papers and 72 bp for their US peers.
“LYields are too high and will fall, but we are in that range between now and when that happens“said James Rossiter of TD Securities in London.
The pan-European STOXX 600 index improved 1% and the British FTSE 100 0.8%, while S&P 500 futures pointed to a 0.5% higher opening later on Wall Street.
Crude oil prices advanced nearly 1% after a brief bullish pauseas operators evaluated expectations of an increase in supply from Russia and Saudi Arabia in the face of forecasts of positive demand from China during the Golden Week holiday.
Source: Ambito
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