US stock exchanges closed at highs, Asian bourses rallied on Stock Connect news, Europe’s bonds fell.
Decent third quarter earnings from a broad scope of companies, and non-farm payroll figures that even though they were lower still demonstrated recovery, prompted indices to rally across the US exchanges yesterday.
S&P 500 up +0.31% at 2,038, DJIA up +0.23% at 17,614
In Asia markets were buoyed by the Stock Connect plan to link Hong Kong and Shanghai exchanges, giving new momentum to investors on both sides and allowing international investors to buy Chinese shares with a net value of Rmb13bn per day. The link is due to go live on 17 November. The Nikkei surged to 17,141.65, a new trend high yesterday after rumours that Premier Abe will delay another sales tax rise.
Nikkei 225 up +1.43%, Hang Seng up +0.7%, Shanghai Composite up +0.8%
With US job gains showing a strong pace and implying a solid economic recovery, risk assets were more appealing than the dollar as the greenback made initial losses against other currencies, including the euro and yen, on yesterday’s market opening. However, by close of markets, the dollar had recovered and was back on track to chase last week’s four-year high due to USD investors taking advantage of the dollar’s dip caused by slightly less than predicted non-farm payroll figures.
Meantime, yields on the US 10-year bond were up – by 4 basis points. On the other side of the pond, Eurozone bonds were feeling the effects of slow to flat growth; Spanish 10-year yields fell 4 basis points, Greek, Portuguese, Italian and Irish bonds all fell by between 3 and 5 bps. The German Bund also edged down 1bp in anticipation of Eurozone countries announcing GDP data on Friday, when US retail sales and consumer sentiment figures are also due.
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