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Capital MarketCOVERNEWSLETTER

Global Stocks Open New Week With Rally

Nigerian Bussinessmen

World Stocks soared on Monday, May 21,  as U.S. Treasury Secretary Steven Mnuchin declared the U.S. trade war with China “on hold” following an agreement to drop their tariff threats that had roiled global markets this year.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.55 percent in early trade, led by strong gains in greater China. Hong Kong’s Hang Seng was up 1.0 percent, Taiwanese shares 1.1 percent and mainland shares 0.4 percent.

Mnuchin and U.S. President Donald Trump’s top economic adviser, Larry Kudlow, said the agreement reached by Chinese and American negotiators on Saturday set up a framework for addressing trade imbalances in the future.

“The weekend talk appears to have made progress. While they still need to work out details of a wider trade deal, it is positive for markets that they struck a truce,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

As safe-haven demand for debt fell, U.S. bond prices were under pressure, keeping their yields not far from last week’s peaks.

The 10-year Treasuries yield stood at 3.065 percent , near a seven-year high of 3.128 percent hit on Friday.

“Recent data suggests the U.S. economy is very strong, hardly slowing down in Jan-Mar. The world economy slowed in that quarter but it appears to be rebounding. And recent rises in oil prices are likely to lift inflation expectations further,” said Tomoaki Shishido, senior fixed income analyst at Nomura Securities.

“We expect more selling until the next Fed’s meeting in June,” he said.

The dollar maintained an uptrend against the yen, rising 0.20 percent to fetch 110.97 yen,, close to Friday’s four-month high of 111.085.

Oil prices held firm near 3-1/2-year highs also on easing trade tensions between the world’s two biggest economies.

 

 

 

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