Stocks Rally Aheed of FOMC Meeting

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Stocks rose around the world, buoyed by gains in commodities prices, and the dollar weakened before central bank policy meetings this week.

The Stoxx Europe 600 Index gained the most in more than two weeks. Crude rebounded from a one-month low as fighting disrupted supplies from Libya, boosting the currencies of oil-exporting nations. Yuan borrowing costs in Hong Kong soared amid speculation China’s central bank was intervening to fend off bearish currency bets. Hungary’s stocks and bonds advanced after the nation was raised to investment grade by S&P Global Ratings.

Major oil producers will meet next week in Algiers to discuss cooperating to shore up prices amid a global oversupply that has hurt state budgets. Before that, the Bank of Japan will undertake a review of its monetary policy and the Federal Reserve will meet to determine whether to raise rates. Volatility has picked up in financial markets over the past two weeks amid concern central banks are becoming reluctant to loosen monetary policy, while at least three bombs discovered in New York and New Jersey over the weekend may increase political turmoil.

“Sentiment is being boosted by a rebound in oil,” said Vasu Menon, vice president for wealth management research at Oversea-Chinese Banking Corp. in Singapore. “Investors are also hoping the BOJ will do something more dramatic though I don’t think that’s going to make a lot of difference. With inflation numbers picking up a little bit in the U.S., the market will start worrying about the Fed again at some stage down the road.”

The MSCI All-Country World Index climbed 0.5 percent at 8:32 a.m. in New York as U.S. crude added 1.5 percent to $43.65 a barrel. The Bloomberg Dollar Spot Index declined 0.3 percent.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]; Tel: +2347065163489.

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