A rebound in US Hi-tech shares has seen Japan’s Nikkei rise more than 1% to a 2 year high, as investors bet on solid growth in the economy and corporate profits globally explain RAKBANK

In other news the  top Republican in the U.S. House of Representatives vowed on Tuesday to complete tax reform in 2017, saying that President Donald Trump and his fellow Republicans in Congress cannot allow the chance to overhaul the U.S. tax code to slip.  While Australia’s central bank has stuck to its upbeat tune on economic growth, but heightened concerns about financial stability suggest interest rates will remain at record lows even as policy makers abroad turn hawkish.  So what does this mean for investors?

Currencies

 

Currency

Currency

 

The dollar hit a three-week high against the yen on Tuesday, after an influential Federal Reserve official said U.S. inflation should rise alongside wages, supporting expectations for the Fed to keep raising interest rates. The dollar rose to 111.775 yen at one point, reaching its strongest level since May 26. That marked a gain of about 2.7% from the dollar’s near 2-month low of 108.81 yen set last Wednesday. The greenback last stood at 111.685 yen, up 0.2% on the day. Against a basket of six major currencies, the dollar rose to as high as 97.609 at one point on Tuesday, its highest level since May 30. The euro held steady at $1.1145 having retreated from a 7-month peak of $1.1296 set on June 14. Sterling edged down against the dollar on Monday, with demand for the currency weakened by uncertainty over domestic politics and over Britain’s economic future, as formal Brexit negotiations got under way. The loonie (Canadian Dollar) rose 1.9% last week, its biggest advance in 18 months. It held onto those gains on Monday even as oil prices fell and the U.S. dollar climbed against a basket of major currencies.

 

Treasuries/Rates

U.S. Treasury yields jumped on Monday after New York Federal Reserve President William Dudley struck a hawkish tone on monetary policy. The 10-year notes fell 9/32 in price to yield 2.19%, up from 2.16% late on Friday, and up from an overnight low of 2.14%. The yield curve between five-year notes and 30-year bonds flattened to a three-month low of 100 basis points.

 

Commodities/Energy

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Gold edged higher on Tuesday after hitting near five-week lows in the previous session as the dollar rose. Spot gold rose 0.1% to $1,243.90 per ounce, after it hit a fresh near five-week low of $1,242.61 during the session. U.S. gold futures for August delivery fell 0.1% to $1,245.10 per ounce. Oil markets held around seven-month lows on Tuesday as investors focused on persistent signs of rising supply that are undermining attempts by OPEC and other producers to support prices. Brent futures were up 4 cents at $46.95. On Monday, they fell 46 cents, or 1%, to settle at $46.91 a barrel. U.S. West Texas Intermediate crude futures were down 1 cent at $44.19 a barrel. They declined 54 cents, or 1.2% in the previous session, to settle at $44.20 per barrel, the lowest close since Nov. 14. The July contract will expire on Tuesday and August will become the front-month.

 

Global Equities

U.S. stocks rose on Monday, with the S&P 500 and the Dow hitting record highs with growth sectors such as technology in favor again as investors appeared to regain confidence in the economy. The Dow Jones Industrial Average rose 144.71 points, or 0.68%, to end at 21,528.99, the S&P 500 gained 20.31 points, or 0.83%, to 2,453.46 and the Nasdaq Composite rose 87.26 points, or 1.42%, to 6,239.01. MSCI’s broadest index of Asia-Pacific shares outside Japan held firm near a two-year high struck last week, but was little changed on the day, with gains in high-tech firms offset by a decline in Australian shares. French stocks outperformed upbeat European indices on Monday following a convincing parliamentary victory for President Emmanuel Macron. Euro zone blue-chips closed 0.9% higher, as did the pan-European STOXX 600.

 

Regional Updates

 

Saudi Arabia’s stock market surged on Monday after a regulatory official was quoted as predicting the bourse would enter MSCI’s emerging market index sooner than most investors had expected, while the rest of the region was subdued. The Saudi stock index rose 2.4%, its largest single-day gain since November, although trading volume was only moderate. The Dubai index added 0.4%. Qatar lost 1.3% with commodity-linked companies some of the worst performers as Brent oil stayed near its 2017 lows. Drilling rig provider Gulf International Services declined 4.0% and petrochemical maker Industries Qatar fell 2.7%. Abu Dhabi’s index edged down 0.2%, weighed down by a 2.9% decline in Dana Gas, the most heavily traded stock on Monday.

 

 


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