In Asian Equity Markets stocks edged up to near three-month highs on Wednesday and global equities held steady near a record as data showing higher U.S. manufacturing activity in May cheered investors looking for signs of a continued rebound in the world’s largest economy. MSCI’s broadest index of Asia-Pacific shares outside Japan ticked 0.08 percent higher, and Japan’s Nikkei added 0.36 percent. Seoul’s Kospi gained 0.36 percent and Australian shares rose 0.64 percent. Chinese blue-chips lagged as healthcare firms lost a day after the sector was lifted by China’s announcement of a third-child policy.
In Currency Markets the dollar clung to small gains from overnight on Wednesday, edging back from near a five-month trough versus major peers, as a pick up in U.S. manufacturing kept bets alive for a quicker normalisation of Federal Reserve policy. The euro traded at $1.2222 after pulling back from near a multi-month top overnight, when it climbed to $1.22545. Sterling also remained lower at $1.4160 after easing off a three-year high of $1.4250 reached Tuesday, while the Canadian dollar was at C$1.20590 per greenback after rallying to a fresh six-year peak of C$1.2007 overnight as oil rose.
In US Equity Markets stocks were mixed on Tuesday, with declines in healthcare and tech stocks countered by energy and financial gains, as investors weighed the latest U.S. economic data for signs of a rebound and rising inflation. The Dow rose 0.13 percent, to 34,575.31; the S&P 500 lost 0.05 percent, at 4,202.04; and the Nasdaq Composite fell 0.09 percent, to 13,736.48. The financial sector hit a record high, while expected growth in fuel demand boosted oil prices and helped lift the energy sector 3.9 percent. The healthcare sector was dragged down by a weak profit forecast from Abbott Laboratories.
In Commodities Markets oil prices extended gains ahead of an OPEC+ meeting and on optimism that fuel demand will grow in coming months as the U.S. summer driving season gets under way. U.S. crude rose 3.5 percent to $68.64 per barrel and Brent was at $71.15, up 2.64 percent on the day. Gold fell below a near five-month price peak hit earlier in Tuesday’s session, as robust U.S. manufacturing data and higher Treasury yields dented its appeal. Spot gold was 0.3 percent lower at $1,902.05 per ounce, while silver was down 0.3 percent at $27.97 per ounce.
In European Equity Markets stocks touched fresh record highs on Tuesday, as strong metal and oil prices boosted shares of big commodity companies, and data showed euro zone manufacturing activity expanded at a record pace in May. The pan-European STOXX 600 index gained 0.8 percent, with UK’s blue-chip index rising 0.8 percent after a holiday on Monday. The German DAX rose 1.0 percent to a new record high, while France’s CAC 40 added 0.7 percent. German carmaker Daimler rose 2.6 percent after it agreed to pay Nokia for using its patents, ending a row over royalties for key technologies.
In Bond Markets the U.S. Treasury yields were set to close the New York session on Tuesday mostly flat, ultimately little moved by manufacturing data released earlier which showed strong demand in the sector, even as industry faces labor and raw material shortages. The benchmark 10-year yield, a proxy for the market’s view on the health of the economy, was last 2.2 basis points higher on the day at 1.615 percent. The two-year yield , which reflects expectations of interest-rate rises, was up less than half a basis point on the day at 0.147 percent.