World stock markets on Monday, July 10, saw a healthy run and the U.S. dollar hit a two-month high against the yen as the latest U.S. jobs data gave investors greater confidence in the strength of the economy.
European stock markets followed Asia higher, with blue-chip stock markets in London, Paris and Frankfurt up 0.2 to 0.5 percent in early Monday trade.
MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent while Japan’s Nikkei rose 0.8 percent to a one-week high helped by weakness in the Japanese currency.
U.S. stock futures also firmed, suggesting Wall Street shares could extend gains made after the U.S. jobs data.
“Unlike in recent years, where there was very patchy growth across the world, we are seeing a synchronized upswing in the global economy,” said Alex Dryden, global market strategist at JP Morgan Asset Management.
“So while it may not be coordinated communication, I do think there’s been a change in rhetoric from central banks across the world — though the ECB is the central bank to watch in the second half of the year.”
Over the past two weeks, markets have reassessed the outlook for tighter monetary policies from major central banks following a string of hawkish remarks.
“We’ll see just how much substance there is to these comments on Wednesday, when the Bank of Canada announces its latest decision, with investors now expecting a 25 basis point increase,” said Craig Erlam, senior market analyst at OANDA.
A rate rise from Canada’s central would be its first interest rate rise in nearly seven years.
The dollar rose almost 0.4 percent to 114.29 yen, a two-month peak, while the dollar index — which measures the dollar’s value against a basket of other major currencies — was a touch firmer at 96.071.
“The solid jobs report gives us more reason to expect the Fed to announce that it’s prepared to start trimming its balance sheet,” said Mitsuo Imaizumi, Tokyo-based chief foreign exchange strategist for Daiwa Securities.
The euro was largely steady at $1.1404. The Group of 20 meeting in Hamburg over the weekend did not have much impact on markets on Monday.
Oil crept up after sliding on Friday on a report showing U.S. crude production rose last week, just as OPEC exports hit a 2017 high, rekindling concerns about a supply glut, Reuters reports.
