Published: Fri, March 17, 2017
Business | By Sandy Mccarthy

Global Stock Markets In Rally Mode Following US Rate Hike

Global Stock Markets In Rally Mode Following US Rate Hike

The Stoxx Europe 600 Index added 0.6 percent at 10:10 a.m.in London, the most in two weeks.

By contrast, the euro was mostly unruffled by the result of the Dutch election Thursday morning, even after preliminary results backed up the earlier exit polls, showing that Prime Minister Mark Rutte had held off the challenge of far-right rival Geert Wilders.

United States bond yields fell slightly in Asian trading on Thursday, but there was some reversal in Europe with the 10-year yield moving above 2.52%. The kiwi fell as New Zealand's economy grew less than economists forecast.

The US currency was undermined by a lower expected Fed trajectory for raising interest rates as markets had been looking for a more hawkish tone. Chair Janet Yellen said in a press conference that the "simple message is the economy is doing well". Investors anticipated the tightening and Treasury yields had climbed with the dollar on speculation the central bank might signal a faster pace of tightening.

Read our Markets Live blog here. The move came after the far-right Party for Freedom, led by Wilders, fell short in the Netherlands general election (http://www.marketwatch.com/story/anti-immigrant-populists-appear-to-fall-short-in-dutch-election-2017-03-15).

There was no surprise from the Bank of Japan monetary policy decision with the bank continuing to target long-term interest rates near zero while the planned amount of annual bond purchases remained at JPY80trn. The Swiss National Bank kept its deposit rate at an historic low and reaffirmed its threat to intervene to keep a lid on the franc.

Later Thursday, President Donald Trump will make his formal 2018 budget request to Congress, although aspects of the budget proposal are already circulating.

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Nine of the 11 major S&P sectors were higher, with the energy index's 1.07 percent rise leading the gainers.

The Aussie was down 0.3 percent at $0.7687 following its overnight surge of 2 percent to a three-week high of $0.7720.

U.S. West Texas Intermediate crude was up 63 cents, or 1.32 percent, at $48.35.

Contracts on the Nikkei 225 Stock Average slid 0.4 percent in Singapore.

The "dot plot" reflects Fed policymakers' interest rate projections. It fell almost 1% on the same day. The shared currency on Thursday bought $1.0736, little-changed from late Wednesday in NY. It reached session high at 1.2376 and dropped to session low at 1.2338 levels.

US crude futures rose 39 cents to $49.25 per barrel, adding to a 2.4 per cent gain on Wednesday.

The ICE Dollar Index DXY, +0.10% which measures the greenback against a basket of six other currencies, rose 0.1% to 100.63 Thursday. Similar Australian yields fell 9 basis points to 2.83 percent. The cement-maker advanced 1.1 per cent to €32.81, while the airline slipped 1.5 per cent to €14.13 as oil prices rose.

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