Global stocks advance on China rally, yen climbs

Sydney - Global stocks rose as Chinese shares rallied after a holiday break, while other markets fluctuated before a meeting between Donald Trump and China’s Xi Jinping. The yen strengthened and oil extended gains.

Stocks in Shanghai jumped the most since October and Taipei share also soared as those markets reopened after a holiday. Australian shares ended higher while those in Japan were mostly lower after both markets fluctuated with their currencies. European shares were little changed. The rand rebounded for a second day. Oil remained above $51 a barrel.

Improving economic data has helped fuel gains that pushed global stocks to a record last month, leaving money managers assessing the scope for the rally to continue.

The monthly US jobs report comes at the end of a week that saw American automakers report disappointing sales. Stocks are becoming expensive relative to historical valuations, but they remain cheaper than bonds based on earnings and interest rates, according to Bloomberg Intelligence Equity Strategists Gina Martin Adams and Peter Chung.

The TV debate between French presidential hopefuls extended beyond four hours on Tuesday night, covering topics from the nation’s debt to ethics. The upcoming election is seen as a barometer for the strength of populist politics. 

Upcoming events of note for investors:

US central speakers include William Dudley, president of the New York Fed, and Governor Daniel Tarullo. Minutes from the March meeting, which are scheduled to be released Wednesday, should put their recent public comments into perspective.

Minutes are also due from the European Central Bank’s latest gathering. China’s President Xi Jinping will meet US President Donald Trump for two days starting on Thursday. US non-farm payrolls are due on Friday.

Here are the major moves in markets:

Stocks

The MSCI Asia Pacific Index climbed 0.2% as of 10:03. The Shanghai Composite rose 1.4%, while Taiwan’s Taiex advanced 1.4%. The Topix index ended flat, with more stocks falling than advancing. The gauge closed at the lowest level since December 7 on Tuesday.

Australia’s S&P/ASX 200 Index added 0.3%. Hong Kong’s Hang Seng lost 0.2%. The Stoxx Europe 600 was little changed. Futures on the S&P 500 Index dropped 0.1%. The underlying gauge advanced 0.1% on Tuesday and the Dow Jones Industrial Average rose 0.2%.

Currencies

The yen was little changed at ¥110.69 /$, after climbing for three straight days. The Bloomberg Dollar Spot Index fell 0.1%, after a two-day gain. The Aussie rose 0.2%, recouping some of its declines triggered by a warning from the central bank that regulators are prepared to consider further measures to tame runaway house-price growth.

The rand jumped 1%, after climbing 0.5% on Tuesday in a rebound from a six-day plunge. Moody’s Investors Service postponed a review of the country’s credit rating after S&P Global cut its rating to junk amid a cabinet purge by President Jacob Zuma.

Bonds

The yield on 10-year Treasury notes fell one basis point to 2.35%, after rising four basis points on Tuesday. Australian 10-year yields were flat at 2.61% after dropping seven basis points on Tuesday.

Commodities

Oil climbed 0.6% to $51.34 a barrel, adding to Tuesday’s advance which was the highest close for crude since March 7. Gold was little changed at $1 255.60 an ounce, after a three-day advance.

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