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Global stocks rise as U.S. jobless claims drop

Global stocks rise

The MSCI world equity index added 0.26% and the pan-European STOXX 600 index gained 0.62%

Global stock markets rose on strong European and U.S. shares on Thursday, with stocks brushing off a rapid rise in Covid-19 cases and oil and the dollar extending their first-half rallies.

On Wall Street, the S&P 500 reached its sixth consecutive all-time closing high on upbeat economic data, and European shares closed higher on a rally in crude prices.

Investors now await Friday’s employment report.

Markets are digesting improved economic data and rising inflation, closely scrutinizing central bank communication for clues regarding the timing, process and magnitude of policy normalization, said Ben Randl, a senior analyst at Bank of America Merrill Lynch.

In an Asia session thinned by a holiday in Hong Kong, Japan’s Nikkei dropped 0.3% and the yen hit a 15-month low as sources in Tokyo said COVID-19 restrictions were likely to be extended.

The benchmark 10-year yield rose 3.1 basis points at 1.4747%. On Wednesday, it tumbled to its lowest level since June 21 at 1.438%, mostly due to quarter- and month-end demand.

The MSCI world equity index added 0.26%. MSCI’s broadest index of Asia-Pacific shares outside Japan ended 0.56% lower.

The pan-European STOXX 600 index gained 0.62%.

Traders think U.S. payrolls on Friday could jolt markets from a slumber that has locked currencies in some of their tightest trading ranges for decades. Initial claims for state unemployment benefits dropped 51,000 to a seasonally adjusted 364,000 for the week ended June 26, the Labor Department said on Thursday, although they are an unreliable guide to Friday’s broader indicators.

June had been the best month for the dollar since Donald Trump was elected U.S. president in November 2016, MUFG’s currency analyst Lee Hardman said.

The key trigger, he said has been the hawkish shift in the Fed’s policy stance. The more hawkish guidance has left market participants less confident that the Fed will maintain loose policy in the coming years.

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