In Asian Equity Markets stocks rallied on Thursday, taking heart from a late recovery on Wall Street after U.S. politicians appeared near to a temporary deal to avert a federal debt default and as Russia reassured Europe on gas supplies, calming volatile markets. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.25 percent in early trade, regaining ground lost in recent days to be little changed on the week. As oil prices came off on Thursday, there were gains in share benchmarks in Korea up 1.3 percent, Australia up 0.64 percent, and Hong Kong up 2 percent. Japan’s Nikkei rose 0.89 percent.
In Currency Markets the safe-haven dollar held close to a 14-month high against the euro on Thursday as a surge in energy prices fuelled worries that inflation could crimp economic growth while also prodding the Federal Reserve to act sooner to normalise policy. The U.S. currency was steady at $1.1558 per euro. The Japanese yen, another safe haven, was mostly flat at 111.375 per dollar, near the middle of its range of the past week and a half. The dollar index was little changed at 94.188 from Wednesday, following a nearly 0.5 percent climb over the past two sessions.
In US Equity Markets stocks ended higher on Wednesday as investors grew more optimistic that congressional Democrats and Republicans could reach a deal to avert a government debt default. The Dow rose 0.3 percent to end at 34,416.99 points, while the S&P 500 gained 0.41 percent to 4,363.55. The Nasdaq Composite climbed 0.47 percent to 14,501.91. American Airlines Group fell 4.33 percent after Goldman Sachs cut its rating on the carrier to “sell” from “neutral”. Shares in steelmaker Nucor Corp fell 2.75 percent after Goldman Sachs lowered its rating to “neutral” from “buy”.
In Commodities Markets oil prices fell nearly 2 percent on Wednesday after hitting multi-year highs, a step back from recent torrid gains after U.S. crude inventories rose unexpectedly. Brent crude futures fell 1.79 percent to settle at $81.08 a barrel. U.S. crude settled down 1.90 percent to $77.43 a barrel. Spot gold was up 0.1 percent at $1,760.78 per ounce, reversing from an earlier session low of $1,744.84. Spot silver fell 0.6 percent to $22.52 per ounce and palladium shed 1.8 percent to $1,879.42. Platinum jumped 1.9 percent to $980.50 per ounce.
In European Equity Markets automakers, retail and travel shares fell more than 2.5 percent on Wednesday, leading declines across all major sectors in Europe as soaring oil and gas prices intensified concerns inflation will dent economic growth. The pan-European STOXX 600 index fell 1 percent, giving back almost all of the gains made on Tuesday. Germany’s DAX fell 1.5 percent after data showed German industrial orders fell more than expected in August on weaker demand from abroad following two months of unusually strong gains.
In Bond Markets yields on the shortest end of the U.S. Treasury curve tumbled on Wednesday after the Senate’s top Republican said his party would support an extension of the federal debt ceiling into December, a move that would avert a historic default later this month. The one-month Treasury yield, which earlier hit a session high of 0.1390 percent, was last at 0.0507 percent. The benchmark 10-year yield, which earlier hit a session high of 1.573 percent, was last down 1 basis point at 1.5206 percent after retreating from June highs along with yields on 20-year and 30-year bonds.