Global stocks rise with increased profits, and the US dollar reaches a 20-year high 2022-04-28 13:53:00

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  • The European STOXX 600 Index rose from its lowest level in six weeks on Tuesday
  • Meta rise boosts US stocks
  • The Bank of Japan pound falls to a 20-year low of 131/dollar

WASHINGTON/LONDON (Reuters) – The U.S. dollar touched its highest level since 2002 on Thursday as Wall Street surged and European shares moved off six-week lows as strong earnings reports offset bleak U.S. economic data.

The yen fell to a 20-year low after the Bank of Japan pledged to buy unlimited amounts of 10-year bonds daily to defend its yield target. The bank’s reinforcement of its commitment to ultra-low interest rates sent the US dollar up again, weakening emerging market currencies and driving up US dollar borrowing costs in currency derivatives markets sharply. Read more

Oil prices rose after reports that Germany is no longer opposed to a Russian oil embargo, which could further tighten global supplies.

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Dow Jones Industrial Average (.DJI) It rose 604.71 points, or 1.82%, to 33,906.64 points, the Standard & Poor’s 500 (.SPX) It rose 103.21 points, or 2.47%, to 4,287.17 points, and the Nasdaq Composite (nineteenth) It added 382.83 points, or 3.07%, to 12871.76 by 2:29 pm ET (1830 GMT).

Technology stocks gained on solid earnings, led by a rise in Facebook’s parent profile platforms (FB.O)which was up to nearly 19%.

These gains supported Wall Street even after the US Commerce Department said in its advance GDP estimate that gross domestic product fell at an annualized rate of 1.4% in the last quarter. Read more

“We lost quite a bit of GDP this morning, but just looking at the headline is misleading,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.

“Trade, inventories and government spending are all deteriorating, but consumer held up and business investment was solid. The shift to services spending was boding well for inflation moving forward, and core PCE came in with a bit of breathing room.”

MSCI World Stock Index (.MIWD00000PUS) It rose 12.25 points, or 1.87%, to 666.15.

European shares rose thanks to strong corporate earnings. stokes 600 pan europe (.stoxx) It closed up 0.6%, but was below session highs, weighed by weak US economic growth data in the first quarter of the year, as well as higher-than-expected German inflation spurring bets on a faster pace of monetary policy tightening by the European Central Bank.

Catalogs in Frankfurt (.GDAXI) and Paris (.fchi) Both rose.

Standard Chartered Bank is listed in London (STAN.L) It jumped 13% after upbeat quarterly earnings. Its Hong Kong-listed shares had earlier risen more than 10%. Read more

“Markets were very scared at the start of earnings season, but last night’s Meta earnings seem to have calmed sentiment,” said Caspar Haines, senior portfolio manager at Bluebay Asset Management in London. “It looks like we’ve turned a corner on the US stock outlook and this should provide some relief to investors watching the dollar rally.”

Earlier, MSCI’s broadest index of Asia Pacific shares outside Japan was (MIAPJ0000PUS.) It rose 0.93%.

The BOJ’s move was in stark contrast to investors’ conviction that US interest rates are about to start rising quickly and sent the dollar higher.

“The message from this morning’s monetary policy statement is that the Bank of Japan is refusing to budge, sticking with its unlimited bond buying plan to defend its 10-year yield target of 0.25%,” said Arne Petimizas, senior analyst at AFS Group.

The euro hit a five-year low against the dollar at $1.04695 before paring losses. It was still on track for its worst monthly performance since January 2015.

The euro’s slide to its lowest levels since 2017 has revived the prospect of reaching parity against the dollar for the first time in two decades, as fears of a eurozone recession encourage investors to rely on bearish bets. Read more

The weakness of the yen and the euro pushed the dollar index to a high of 103,930, the highest level since December 2002.

EUR/USD at 5-year lows, USD/JPY at 2-decade highs

Japan’s Nikkei Index (.N225) It rose 1.75%, the best day in two weeks, as investors cheered on the weaker currency helping Japanese exporters. Japanese government bonds achieved their best rise in a month.

US government bonds rose after signs of strength in the US labor market that outpaced the expected drop in economic growth in the first quarter.

Investors expect US interest rates to rise and next week’s Federal Reserve meeting will bring the first consecutive hikes of 50 basis points.

Oil prices rose, with Brent crude futures up 1.65% and US crude up 2.85%.

Germany’s representatives in the European Union no longer oppose a full Russian oil embargo as long as Berlin is given time to secure alternative supplies, the Wall Street Journal reported Thursday. Germany is highly dependent on Russian energy imports and has previously opposed a complete ban.

Spot gold prices rose, surpassing the lowest level in ten weeks that touched earlier in the session under pressure from the stronger US dollar.

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Additional reporting by Chris Prentice in Washington, Tom Wilson, Samuel Indyk and Saykat Chatterjee in London and Tom Westbrook in Singapore; Editing by Kim Coogle, Thomas Janowski and David Evans

Our criteria: Thomson Reuters Trust Principles.

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