Global stocks climb following blockbuster quarter

Sydney - Global stocks rose at the start of a busy week that includes a meeting between Xi Jinping and Donald Trump and culminates in the monthly US jobs report.

Stocks from Frankfurt to Indonesia gained, after the best quarter for equities since 2013. Japanese shares, one of the worst performers among major markets in the first three months, rebounded as a report showed an improving outlook among the countries’ largest firms.

Markets in China and Taiwan are closed for holidays. The dollar was little changed after New York Federal Reserve President William Dudley said there’s no rush to raise interest rates.

As the second quarter gets going, political developments threaten to cloud the improving global economic outlook. The first major data release showed confidence among Japan’s large manufacturers improved for a second consecutive quarter in the first three months of the year.

The dollar was struggling for upward momentum even before Dudley’s dovish comments on Friday, and despite last month’s Fed rate hike, on concern Trump may struggle to steer his promised tax cuts through Congress. A Bloomberg gauge of the currency recently hit a four-month low.

“Investors will look to the economic data and minutes out from both the FOMC and ECB in the week ahead for the next clues,” said Michala Marcussen, Paris-based global head of economics at Societe Generale.

“When it comes to risk sentiment, however, markets are likely to take their cue from the two-day meeting between President Xi and President Trump starting on Thursday in Florida with the US-China trade deficit at the top of the agenda.”

What investors will be watching this week:

The RBA is projected to keep rates steady on Tuesday. Australian trade data due before may give guidance to the debate between the need to restrain currency strength and damping runaway east-coast property prices. 

India’s central bank will probably also hold rates. Inflation numbers are due from Thailand, South Korea and the Philippines. Fed speakers include Dudley and Governor Daniel Tarullo. Minutes from the March meeting should put their 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. US non-farm payrolls are due on Friday.

Here are the main moves in markets:

Stocks

The Stoxx Europe 600 climbed 0.2% as of 10:36, after increasing 5.5% for the first three months of the year, the best quarter in two years. The MSCI Asia Pacific Index gained 0.3%, after soaring 8.8% in the first quarter, the best performance since 2012.

The Topix index climbed 0.3%, after falling on Friday to close the quarter with a loss. Hong Kong’s Hang Seng was up 0.6%. South Korea’s Kospi and Singapore’s Straits Times Index were each up 0.3%, and Jakarta’s Composite climbed 0.6%.

Australia’s S&P/ASX 200 Index added 0.1%. Futures on the S&P 500 rose 0.1% after losing 0.2% on Friday.

Currencies

The yen fell 0.1% to ¥111.47/$ while the Australian dollar lost 0.3%. The Korean won rose 0.3%, building on its more than 7% advance in the first quarter.  The euro strengthened 0.1% to $1.0667. The Bloomberg Dollar index rose less than 0.1%.

Bonds

The yield on 10-year Treasuries rose one basis point to 2.40 percent, after dropping three basis points on Friday.

Commodities

WTI crude climbed 0.1% to $50.65 a barrel, after the biggest weekly gain of the year. Crude stockpiles are starting to decline in a sign that the production cuts implemented this year are bringing the market to balance, according to OPEC’s Secretary-General Mohammad Barkindo.

Gold fell 0.3% to $1 246.09 per ounce. The metal has alternated between gains and losses for the past six days.

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