Asian shares and currencies rose along with industrial metals as improving U.S. economic data coupled with prospects for stimulus in China spurred risk-taking.
The MSCI Asia Pacific Index was set for its biggest three-day rally since August, led by banks and raw-materials producers. The Stoxx Europe 600 Index snapped a five-day winning streak. South Korea’s won and Malaysia’s ringgit led gains among major currencies, while Japan’s yen was the biggest loser. U.S. and Australian government bonds dropped as investors shunned haven assets. Copper rose for a third day and oil retreated from an eight-week high.
A raft of better-than-expected U.S. economic data and optimism China will do more to tackle the slowest growth in a quarter century are reviving investor sentiment, with global equities having recouped more than half of their 2016 losses since sinking to a 2 1/2-year low three weeks ago. A private report on American payrolls spurred a retreat in U.S. Treasuries on Wednesday as speculation increased that the Federal Reserve will raise interest rates this year. China eased lenders’ reserve requirements on Monday, before an annual meeting of the nation’s parliament meets this weekend.
“Globally it’s becoming risk-on,” said Ryoma Sugihara, head of equity flow sales in Tokyo at Societe Generale SA. “We’re starting to see the bottom in U.S. manufacturing, oil is rebounding, China is stabilizing.”
The MSCI Asia Pacific Index rose 1.3 percent as of 8:11 a.m. London time, building on a 3.7 percent advance over the last two days. Japan’s Topix climbed 1.4 percent, as a gauge of banking stocks surged 6.2 percent. Singapore’s Straits Times Index rallied 2 percent and the Shanghai Composite Index gained 0.4 percent. Chinese shares advanced for a third day before the Saturday start of the National People’s Congress, where delegates will sign off on a new five-year economic plan.
The Stoxx Europe 600 Index declined 0.1 percent, after closing Wednesday at a one-month high. Standard & Poor’s 500 Index futures were little changed before data is released Thursday on initial jobless claims and services output.
The Bloomberg JPMorgan Asia Dollar Index advanced for a fourth day, its longest winning streak since October. The won and the ringgit strengthened at least 0.8 percent versus the greenback, climbing to two-week highs. The yen weakened 0.4 percent as investors favored higher-yielding currencies.
China’s yuan rose 0.1 percent in Shanghai, the biggest advance in two weeks.
The yield on 10-year U.S. Treasuries rose one basis point to 1.85 percent, headed for the highest close in a month. The Fed’s Beige Book, showed the U.S. economy continued to expand across most of the country, while wage growth was described as varying widely, “from flat to strong.”
Germany’s government bonds declined, pushing the 10-year yield up one basis point to 0.22 percent, before data that will shed light on how services industries performed last month in both the nation and the eurozone.
Crude fell 0.3 percent to $34.55 a barrel in New York, after gaining 5.8 percent over the last three days.
Copper prices increased 0.5 percent in London, advancing for a third day. Nickel rose 0.7 percent and zinc added 0.6 percent.