(Corrects the spelling of the alternate trading venue to “Liquidnet” instead of “Liquident” in paragraph 11 of the June 8 story)
* MSCI ACWI, two European indices rise to all-time highs
* VIX volatility indicator slides to pre-COVID levels
* ECB and US inflation data will be released on Thursday.
* Chart: Overall asset performance http://tmsnrt.rs/2yaDPgn
* Chart: World Exchange Rates http://tmsnrt.rs/2egbfVh A benchmark global equity index and two key European stock indices hit new highs on Tuesday, while the dollar rose in anticipation of faster inflation as volatility declined to lows last seen before the coronavirus. pandemic.
Yields on US Treasury debt fell to their lowest level in more than a month, while euro zone bond yields fell with markets in a state of hold ahead of a policy meeting from the European Central Bank and US inflation data, both due Thursday.
The 10-year US Treasury bond fell 3.4 basis points to 1.5364%, suggesting that bond investors do not see a rise in inflation despite nagging nerves over the insistence of the Federal Reserve that a likely rise in consumer prices will be transitory.
Markets have been quiet ahead of the second quarter earnings release in July, when very strong results will be reported as they were so dismal a year ago, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
“Knowing that a solid earnings season is coming removes some worries,” Tuz said, preventing share prices from falling. “The markets are as flat and calm as they can be today.”
The MSCI World All Country Index, a US-centric benchmark for global equity markets, closed down 0.01% to 716.96 after previously scaling a new intraday high of 718. , 19.
In Europe, the pan FTS Eurofirst 300 index added 0.08% to close at a new all-time high, while the STOXX 600 index rose 0.15% to also establish a new closing high.
Telecom, travel and real estate stocks in Europe drove equity markets higher, but weak German industrial production data and doubts that Britain would lift the remaining pandemic restrictions later this month limited earnings.
The travel and leisure index rose 1.8%, supported in large part by earnings from low-cost carrier easyJet after Goldman Sachs raised the shares to “buy.”
Wall Street’s top three indices were up, and big-tech FAANG stocks led stocks higher as the prospect of lower inflation makes its long-term gains more valuable.
“We’ve seen the FAANGs back off in reaction to people buying the story that inflation is transitory,” said Simon Maughan, head of alpha trading at Liquidnet, an alternative trading venue.
Amazon.com Inc and Apple Inc rose while Alphabet Inc, parent of Google, and Facebook Inc fell.
Rising stocks outnumbered declining stocks on both the Nasdaq and the New York Stock Exchange, while growth-oriented stocks slightly outperformed undervalued stocks.
The Dow Jones Industrial Average fell 0.09%, the S&P 500 gained 0.02% and the Nasdaq Composite added 0.31%.
Shares of electric car maker Tesla fell 0.3% after previously rising according to data from Beijing showing that its Chinese sales, which comprise a third of the company’s total sales, had seen a 29% jump on last month.
The data also showed that overall new electric vehicle sales in China increased 177% compared to the previous year.
In a sign of compliance by investors, the stock market’s so-called “fear gauge”, the VIX, fell to just 15.15, a level not seen since February 2020.
The British pound was under pressure as the British government considered whether to delay the removal of most of the remaining coronavirus restrictions and oil was stagnant, but both appeared to be temporary phenomena at worst.
Recent comments suggested that the European Central Bank has no plans to back down on its massive stimulus program anytime soon.
“I would expect the ECB to maintain a dovish stance as it would not want it to be seen as moving towards downsizing at this point,” said Lombard Odier, head of foreign exchange strategy at Vasileios Gkionakis.
The dollar index was up 0.148% and the euro was down 0.13% at $ 1.2173. The Japanese yen weakened 0.22% against the dollar at 109.49 per dollar.
US gold futures closed 0.2% lower at $ 1,894.40 an ounce.
Brent crude futures closed up 73 cents at $ 72.22 a barrel. US crude futures rose 82 cents to settle at $ 70.05 a barrel.
Overnight in Asia, Tokyo’s Nikkei 225 had fallen 0.2% as losses in market heavyweights offset gains by drug makers after the Alzheimer’s drug Eisai Co received US regulatory approval.