Global stocks extend rally as oil reverses losses

BLOOMBERG

Global stocks rallied for a fifth day and oil climbed, while the dollar reversed gains, and Singapore’s currency dropped as the city state unexpectedly loosened monetary policy.
The Stoxx Europe 600 Index rose as Nestle SA led a surge in food companies, after Asian equities posted their longest rally in a year, while Standard & Poor’s Index futures were little changed after Bank of America Corp.’s earnings missed estimates. Crude advanced as Qatar said there was a “positive feeling” before major producers meet in Doha. The greenback gave up gains against most major peers and base metals denominated in the U.S. currency pared losses. Singapore’s dollar weakened the most in five months after the local monetary authority said it will no longer seek a stronger currency. Euro-area bonds fell after data showed annual inflation unexpectedly stagnated in March.
Better-than-expected earnings from bellwether JPMorgan Chase & Co. on Wednesday added fuel to a global equities rally that’s been led by Chinese data this week showing signs of an improvement in the world’s second-biggest economy. The dollar’s more than 6 percent drop since late January is starting to meet some resistance amid lackluster euro-area expansion and investor speculation that U.S. economic growth remains intact, strengthening the case for higher interest rates this year.

Stocks
The Stoxx 600 rose 0.3 percent at 1:58 a.m. in London, with food-and-beverage companies posting the best performance of the gauge’s 19 industry groups.
Nestle climbed 2.2 percent after its sales beat analysts’ estimates. Burberry Group Plc tumbled 5.8 percent after forecasting a revenue drop at its wholesale unit in the first half of the year. Peer Cie. Financiere Richemont SA lost 0.9 percent.
Commodity producers, the best performers among industry groups in 2016, fell for the first time in five days. Anglo American Plc and Randgold Resources Ltd. lost at least 2 percent. Lenders also declined after jumping the most since 2011 on Wednesday.
S&P 500 futures were little changed after equities Wednesday hit a four-month high. Bank of America retreated 0.9 percent in premarket trading after the second-biggest U.S. lender by assets said profit declined 13 percent on a drop in trading and underwriting revenue and a 30 percent increase in provisions for credit losses. Wells Fargo & Co. dropped 0.8 percent after the largest U.S. bank by market value said first-quarter profit fell 5.9 percent as it set aside more money for soured loans and expenses increased.
The cost of living in the U.S. excluding food and fuel rose in March less than forecast, data showed Thursday. A separate report showed that the number of Americans filing applications for unemployment benefits unexpectedly declined last week to match a more than 42-year low.
The MSCI Asia Pacific Index jumped 1.8 percent, erasing its loss for the year. The MSCI Emerging Markets Index rose 0.5 percent, set for the highest close since Nov. 6 and a sixth day of gains. The gauge has advanced 6.8 percent this year, compared with a 0.4 percent gain in the MSCI World Index of shares in developed countries.
The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong rose 0.5 percent to a three-month high, and the Shanghai Composite Index also gained 0.5 percent.
South Korea’s Kospi jumped 1.8 percent as trading resumed. India and Thailand were closed Thursday.

Currencies
The Bloomberg Dollar Spot Index was little changed.
The pound fell for a second day against the dollar as the Bank of England left its key interest rate at a record-low 0.5 percent. Investors may also look to whether officials discussed a looser monetary policy to counter the potential economic pain of Britain voting to quit the European Union in a June referendum.
The MSCI Emerging Markets Currency Index fell 0.1 percent, dropping for the first time in six days as Singapore surprised markets by easing monetary policy, spurring speculation other central banks will follow suit.
Bank of Canada Governor Stephen Poloz said this week that a stronger loonie may put export growth at risk.
“Everyone else will try to push back,” said Stephen Jen, the co-founder of hedge fund SLJ Macro Partners LLP and a former International Monetary Fund economist. “The global currency war is alive and well. You can see how unhelpful the whole process is.”
The Singapore dollar slid 0.9 percent in the wake of the new stance, which was last adopted at the height of the global financial crisis in October 2008. Twelve of 18 economists surveyed by Bloomberg predicted a path of appreciation would be maintained.
Malaysia’s ringgit lost 0.5 percent versus the greenback and New Zealand’s dollar slid 0.7 percent. The yuan fell for a third day after the People’s Bank of China weakened its daily reference rate by the most in three months.
South Africa’s rand reversed declines to rise 0.2 percent and Mexico’s peso added 0.3 percent, while Turkey’s lira lost 0.3 percent. South Korea’s won fell 0.9 percent from Tuesday’s close after the ruling party’s election setback undermined the president’s ability to enact her economic agenda.

Commodities
Industrial metals in London declined on concerns that recent price gains could tempt producers to restart capacity and add to global oversupply, while a stronger dollar also weighed on all commodities. Copper reversed losses, rising 0.3 percent to $4,842 a metric ton, while zinc slipped 0.1 percent and nickel lost 0.6 percent.
West Texas Intermediate rose 0.8 percent to $42.09, reversing a loss of as much as 2.2 percent. Brent added 0.8 percent to $44.55. The International Energy Agency predicted the global oversupply will be almost gone in the second half.

Bonds
Benchmark German 10-year bunds fell, paring a recovery from Wednesday that pushed the yield down by the most in two weeks. Ireland sold 10-year bonds at a record-low yield of 0.817 percent, even as the nation remains locked political stalemate following inconclusive elections in February.
U.S. Treasuries yielded 1.80 percent before the nation sells $12 billion of 30-year bonds on Thursday.
Ukraine’s bonds gained after lawmakers approved Volodymyr Hroisman, the speaker in parliament and an ally of President Petro Poroshenko, as prime minister after a political crisis jeopardized bailout funding to revive the economy.
The average yield on euro-denominated corporate junk bonds fell below 5 percent for the first time since Dec. 2, according to Bank of America Merrill Lynch index data. The cost of insuring both investment-grade and high-yield corporate debt against default was little changed, based on Markit iTraxx
indexes of credit-default swaps.