(US Market Open, New York dateline, adds byline)
* Energy boils as global equity markets rally
* Germany has suffered a 4% fall in industrial production
* Hope US can resolve debt-boundary dispute
* Key US employment data due out Friday
* Graphic: Global Asset Display tmsnrt.rs/2yaDPgn
* Graphic: World FX Rates tmsnrt.rs/2egbfVh
NEW YORK/LONDON, Oct 7 (Businesshala) – World equity markets rallied more than 1% on Thursday as hopes rose that Washington would resolve a dispute over US debt limits, while global easing in energy prices raised fears of “inflation”. deepened.
European markets rallied to 2-1/2-month lows and Wall Street also jumped as steady crude and natural gas prices offered relief after a 4% drop in German industrial output in the supply chain. Disruptions exposed.
German production of cars and auto parts fell 17.5% in August, providing a clear indication of the bottlenecks posed by a combination of runaway inflation and moribund growth, or stagflation, due to a lack of supply of intermediate products.
But the number of Americans filing new claims for jobless benefits fell by the most in three months last week, suggesting that the recovery in the US labor market is gaining momentum after the recent recession eased COVID-19 infections. Had been.
Bill Sterling, global strategist at GW&K Investment Management, said the fear of stagflation is over as people confuse the direction of travel towards low growth and high inflation with the final destination.
“It’s speed of travel versus direction of travel,” he said. “The journey is ultimately to a global expansion that remains intact, which has faced this stagflation only recently.”
MSCI’s All-Country World Index rose 1.53%, while the broader STOXX Europe 600 Index rose 1.69%.
On Wall Street, the Dow Jones Industrial Average rose 1.56%, the S&P 500 gained 1.46% and the Nasdaq Composite was up 1.64%.
Euro zone bond yields fell as energy prices tumbled, recovering from a sharp sell-off in debt markets a day earlier that was driven by inflationary concerns.
The yield on the benchmark German 10-year Bund fell 0.6 basis points to -0.188%.
US Treasury yields rose as traders await US employment data for September, which will be released on Friday. Volatility eased at the shortest end of the curve this month in view of a possible plan to avoid default in government debt.
Investors anticipate that employment figures that are close to consensus will lead the Federal Reserve to signal at its November meeting when it will roll out its massive stimulus program.
The benchmark 10-year US Treasury yield was up 3.8 basis points at 1.5525%.
Oil prices shook off early losses, as the emergency turned positive as a possible release of US reserves and Russia’s offer to help deal with an energy crisis eased concerns of tight supplies over the winter. did nothing to reduce it.
Brent crude rose $0.38 to $81.46 a barrel. US crude was up $ 0.31 at $ 77.74 a barrel.
Natural gas prices are still more than five times higher since the start of the year, and the massive increase in recent weeks has caught the attention of policymakers around the world.
Britain’s National Grid said Britain faced a tight power supply this winter, while local media reported Spain’s energy minister had summoned top executives from three of its main power firms.
back to futures
Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan closed up 1.8%, its biggest one-day rise since August.
Hong Kong led Asia’s gains, jumping 3% to a one-year low. South Korea’s Kospi ended with losses of 1.8% and Japan’s Nikkei up 0.5% with losses for eight days.
The Chinese property sector’s debt market was still bleeding heavily, with the Cassa Group – China’s first default by a firm in 2015 – up 8.2% and some Greenland Holdings, which has built some of the world’s tallest residential towers, falling. half of their marked value.
The dollar was stable, not far from a 12-month high last month against a basket of currencies and a 14-month high against the euro.
The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.099% to 94.125.
The euro was up 0.05% at $1.1562, while the Japanese yen was up 0.05% at $111.4700.