LONDON/SINGAPORE—Global stocks edged higher on Wednesday, with investors cheered by Chinese stimulus hopes and a drop in bond yields, while the dollar held steady before the release of the latest Federal Reserve meeting minutes and U.S. inflation figures.
Meanwhile, oil prices were also little changed as traders kept an eye on the conflict between Palestinian terrorists and Israel. Prices spiked on Monday in the wake of Hamas’ attack, before cooling somewhat on Tuesday.
The MSCI All World stock index was last up 0.2 percent on Wednesday. Asian stocks were firmly in the green, with the MSCI Asia index, which excludes Japan, rising 1.25 percent after a rally in the U.S. and Europe on Tuesday.
Europe’s continent-wide STOXX 600 index was 0.12 percent higher in early trading after surging 1.96 percent in the previous session. French luxury company LVMH fell 6.3 percent after it posted results which showed its sales growth slowed.
Global stocks, which had been on the slide since early August, have rallied for the last few sessions. Germany’s DAX index was flat on Wednesday but jumped 1.95 percent on Tuesday.
Investors have shifted back to equities as U.S. bond yields—which underpin borrowing costs around the world—have dropped from their highest levels since 2007 as Fed officials have hinted that rate hikes are over.
Atlanta Fed President Raphael Bostic was applauded when he told a room full of bankers in Nashville on Tuesday: “I actually don’t think we need to increase rates anymore.”
Futures for the S&P 500 were up 0.13 percent after the stock index climbed 0.52 percent on Tuesday.
“I’m expecting the market to remain in wait-and-see mode throughout the day because we have the Fed minutes tonight ... and U.S. inflation tomorrow,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers.
The minutes from the Fed’s September meeting, when it chose to hold interest rates at 5.25 percent to 5.5 percent but signalled more hikes might be on the way, are due to be released at 1800 GMT (2 p.m. ET). Investors will scrutinise them for hints about where U.S. rates are heading.
On Thursday, the latest U.S. inflation data is expected to show that the growth in prices slowed slightly to 3.6 percent in September, from 3.7 percent in August.
Bond yields tumbled again on Wednesday, as prices rallied. The yield on the global benchmark 10-year U.S. Treasury note was last down 8 basis points at 4.571 percent, sharply below last week’s peak of 4.887 percent, which was the highest level since 2007.
The dollar index, which tracks the currency against six major peers, was trading roughly flat at 105.76. It has fallen around 1.6 percent since hitting an 11-month high of 107.34 last week.
In commodity markets, oil prices have steadied since Monday’s bounce on concern that the attack on Israel could spark a wider conflict. Brent futures traded at $87.78 a barrel, little changed on the day, after hitting $89 on Monday.
European gas prices, which had jumped on news of the Middle East violence, have surged further on concern a gas pipe in Finland was sabotaged. The benchmark Dutch gas contract touched a seven-month high on Tuesday.
