LONDON Jan 13 World stocks rose towards a
six-year high on Monday and the dollar and bond yields slipped
as last week's surprisingly weak U.S. jobs data strengthened the
case for the Federal Reserve to keep interest rates low for
Emerging markets were one of the biggest beneficiaries,
having previously been under pressure as investors took funds
away from those economies most reliant on external funding back
into the recovering developed world.
Banking stocks rallied in Europe after regulators agreed to
ease a new rule on how banks' leverage ratios are calculated.
Friday's data showed the U.S. economy posted its weakest
monthly job growth in three years in December. This triggered a
slide in U.S. Treasury yields, where the benchmark rate
posted its biggest one-day drop since October.
The report did not change expectations that the Fed would
wind down its bond-buying programme by the end of the year, but
interest rate futures markets pushed back the timing of the
first rate hike towards late 2015 from mid-2015 .
"The market is taking its leads from U.S. Treasury markets,
which are generally weighing on the dollar across the board,"
said Adam Cole, global head of FX strategy at RBC Capital
MSCI world equity index gained 0.2 percent,
approaching a six-year high set last month, buoyed by a 0.9
percent rise in emerging stocks.
European stocks rose 0.1 percent, staying hear a
5-1/2 year peak. Japan was closed for a public holiday.
European banking stocks rose 1.2 percent after
global banking regulators agreed on Sunday to ease a new rule on
how banks' leverage ratios are calculated to try to avoid
crimping financing for the world economy.
"This is a good news because it will give banks some
breathing space. There have been concerns that high ratios would
hit banks' profitability," said Global Equities' head of
quantitative sales trading David Thebault.
"The fact that euro zone assets lead the gains so far this
year is a positive sign. It means that things have greatly
stabilised and that the region is not a pariah for global
investors as it used to be."
Investors will keep an eye on the fourth-quarter earnings
season, with major U.S. banks including JPMorgan,
Citigroup and Goldman Sachs announcing results this
week. European earnings will gather pace in the last week of the
Benchmark 10-year euro zone bond yields were
slightly lower on the day while Bund futures prices
rose 19 ticks. Italian bond yields fell to 3.9
percent, near an eight-month low hit last week.
The 10-year U.S. yield was stable at 2.8635 percent,
slightly above Friday's lows.
The dollar fell 0.7 percent to 103.24 yen, its lowest
level in nearly a month, pulling further away from a five-year
high of 105.45 yen set earlier this month.
In commodity markets, gold extended its rally to a one-month
peak at $1,254.05 an ounce having climbed 1.5 percent on
Friday. Gold is the top performing asset so far this year ().
Oil prices retreated after nations struck a six-month deal
with Iran to curb its nuclear programme and U.S. President
Barack Obama urged Congress not to impose additional sanctions
on the country. Nymex oil futures lost 0.7 percent Brent
crude fell below $107 a barrel.