World stocks kick off August at seven-week high, US futures on back foot

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LONDON, Aug 1 — World stocks hit seven-week highs today, buoyed by recent strong corporate earnings and declining expectations for hefty interest rate rises, though US index...

LONDON, Aug 1 — World stocks hit seven-week highs today, buoyed by recent strong corporate earnings and declining expectations for hefty interest rate rises, though US index futures were indicating a lower start to August at the Wall Street open.

“There’s a sense of relief that the Fed have at least got an eye on slowing growth. They are not going to be pig-headed and keep hiking interest rates as the economy falls into deep dark recession,” said Giles Coghlan, chief currency analyst at HYCM. The US ISM manufacturing survey for July is due at 1400 GMT, forecast to give an expansionary reading of 52, according to a Reuters poll. Key US employment data is due on Friday.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.27 per cent but stayed within recent ranges. Speculators bet on the dollar against the yen on rate hike expectations and have found themselves squeezed out by the sudden turnaround. The dollar hit six-week lows against the yen and was down 0.67 per cent at ¥132.335 .

The yield curve remains sharply inverted, suggesting bond investors are more pessimistic on the economy than their equity brethren.

 

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