As the dollar declined stocks, bond yields and commodities pushed higher on Thursday. It appears that investors started to disregard their inflation concerns that ignited last week’s sell-offs in the markets.
The overnight gains for Wall Street and Asia moved the MSCI’s 47-country world stocks index back in positive territory for the year with Europe’s main markets bringing in gains between 0.6 – 1 percent.
“For me it’s a clear indication that inflation is not as big a threat as people made it out to be over the past couple of weeks,” said Lukas Daalder, a chief investment officer. “The trend behind the market is still very strongly pointed upwards,” he added. “2017 was a very momentum-driven market, and if that’s still the case, which after yesterday it appears to be, then we will probably see new highs before too long.”
U.S. Treasury yields on benchmark 10-year notes reached a new four-year high of 2.94 percent, which also drew the gap in German Bunds to its largest in 10 months to 0.786.
The dollar plunged to a 15-month low against the yen of 106.18 yen, now down 3.8 percent from highs reached earlier this month near 110.50 yen. The euro and pound both moved above the $1.25 and $1.40 thresholds.
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Australian shares gained 1.15 percent and South Korea’s KOSPI was up 1.1 percent. Japan’s Nikkei increased 1.5 percent, moving away from the previous session’s four-month low.
Brent crude futures gained more than 1 percent to $65.06 per barrel early in the session before losing momentum.
While the dollar is a key influence as oil is priced in it, oils gains were also generated from the previous day’s supply data as well as comments for Saudi Arabia’s Energy Minister that major oil producers would prefer tighter markets than to put an end supply cuts before the agreement called for.