(Bloomberg) — Stocks climbed Thursday and U.S. and European equity futures edged up on the Federal Reserve’s projections for interest rates to remain near-zero through 2023. U.S. Treasury yields advanced and the dollar declined.
Japan’s Topix jumped past the 2,000 mark for the first time since 1991, becoming Asia’s top-performing major equity index this year. MSCI Inc.’s Asia-Pacific gauge rose more than 1%. The S&P 500 hit a record as Fed Chairman Jerome Powell stressed the central bank won’t raise interest rates until the U.S. economy shows tangible evidence it has fully healed from Covid-19.
Japan’s government bond yields lifted on a Nikkei report that the Bank of Japan is considering widening the trading range around the 10-year target, which could spur concerns about policy tightening. The Australian dollar outperformed most major currencies on a strong jobs report.
Investors appear to be somewhat reassured by the Fed’s renewed emphasis on continued policy support. Markets were braced for a more hawkish tone, given the improvement in the economic outlook amid the stimulus-fueled recovery from the pandemic. Inflation concerns drove bond yields sharply higher in recent weeks and spurred a rotation from growth stocks to value shares.
“The market reaction suggests investors are satisfied with the Fed’s explanations for now,” said Tai Hui, chief Asia market strategist at JPMorgan Asset Management. “Inflation is expected to rise in the coming months, and the Fed may need to provide more hand-holding to the market during this price spike.”
Read: Fed Keeps Zero-Rate Outlook, Sees Inflation Bump Short-Lived
Elsewhere, oil slipped after U.S. crude stockpiles topped half a billion barrels and the International Energy Agency said global supplies are plentiful. Bitcoin traded around $59,000.
These are some key events this week:
Bank of England rate decision Thursday. BOE is expected to leave monetary policy unchanged.Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.
Stocks
S&P 500 futures were up 0.2% as of 7:07 a.m. in London. The S&P 500 Index rose 0.3%.Japan’s Topix Index rose 1.2%.Australia’s S&P/ASX 200 Index dipped 0.7%.South Korea’s Kospi Index added 0.6%.Hong Kong’s Hang Seng Index rose 1.7%.China’s CSI 300 Index was up 0.8%.Euro Stoxx 50 futures added 0.6%.
Currencies
The yen traded at 108.85 per dollar.The offshore yuan was at 6.4914 per dollar, down 0.1%.The Bloomberg Dollar Spot Index fell 0.2%.The euro was at $1.1982.The Aussie jumped 0.6% to 78.45 U.S. cents.
Bonds
The yield on 10-year Treasuries rose four basis points to 1.69%.Australia’s 10-year bond yield added seven basis points to 1.78%.
Commodities
West Texas Intermediate crude shed 0.3% to reach $64.43 a barrel.Gold rose 0.4% to $1,751.83 an ounce.
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