Global stock markets advanced, lifted by the biggest gain in US factory orders for eight months and solid manufacturing data from Germany.
As investor shook off anxiety over the threat of deflation in the euro zone, German bund yields rose.
The yield on 10-year German bunds rose above 0.40 per cent to levels last seen before the ECB began buying bonds earlier this year. It last traded at 0.444 per cent.
The Irish market was closed for the public holiday as was London, meaning trading volumes were lighter than usual in European exchanges generally.
Still, data showed manufacturers in the euro zone raised prices for the first time in eight months in April as the number of people working the sector rose at the fastest pace for nearly four years .
EUROPE
Markit’s purchasing manager’s index for manufacturing, which accounts for about a fifth of the German economy, fell to 52.1 from 52.8 in March, but stayed above the 50 line separating growth from contraction for a fifth straight month.
The final reading topped a preliminary estimate of 51.9. Such news spurred Germany’s Dax index, which rose 1.6 percent to outperform its peers.
“The German data shows that the manufacturing activity is still expanding and concerns that a recent rise in the euro would hurt German companies are definitely overdone. The German economic growth has been solid and gives support to the stock market,” said Christian Stocker, strategist at UniCredit.
“I think the majority of analysts will be revising their 2015-16 earnings forecasts higher during the next six months,” he added.
Viewed alongside European Central Bank reports showing credit creation in Spain and Italy picked up in March, the manufacturing data was seen to bode well for inflation expectations in Europe.
“If there’s credit creation then chances are there is jobs creation and therefore earnings creation,” said Anastasia Amoroso, global markets strategist at JP Morgan Asset Management. “It is very good for stocks, absolutely.”
NEW YORK
US stocks rose with the dollar as investors were encouraged by corporate results and positive factory data in the US, where orders climbed 2.1 per cent in March for the biggest gain since July. The data was seen as a further sign that a winter slowdown may have been temporary.
The Standard & Poor’s 500 gained 0.4 per cent at lunchtime in New York, within two points of its closing record, as earnings from Comcast and Berkshire Hathaway surpassed estimates.
“With nothing negative coming from overseas, you’re seeing a continuation of the positive price action from Friday afternoon,” said Michael James, a Los Angeles-based managing director at Wedbush Securities.
“We still have a pretty heavy slate of earnings this entire week, with a number of high-profile companies reporting, that’ll probably be the focus for the next several days.”
The dollar edged higher after a two-week correction in thin trading on data suggesting the US economy might be stabilising following a soft patch in the first quarter.
The greenback rose 0.1 per cent against a basket of six major currencies. The euro was down 0.36 per cent against the dollar at $1.1158.
Oil eased after reaching a 2015 high, as ample current supplies and weak Chinese factory activity countered expectations of a tighter supply and demand balance later this year.
Brent crude slipped 26 cents to $66.20 a barrel. US crude lost 33 cents to $58.82 a barrel.
– (Reuters/Bloomberg)
