US equities rose within touching distance of record highs amid renewed optimism that the Federal Reserve would maintain a gradual path of policy normalisation, while the dollar steadied and US treasuries gave back some of the previous sessions gains.
Oil prices rose for a fourth consecutive session, with Brent closing up 1.4% at $48 per barrel. The Canadian dollar hovered around its 12-month high following the Bank of Canada’s decision to raise interest rates.
US producer prices, a key measure of inflation, rose 0.1% in June (vs expectations of no change) as sustained increases in the cost of services offset declining energy prices. Consumer price inflation data is due to be released today.
US earnings season starts to ramp up today with JP Morgan, Citigroup and Wells Fargo all scheduled to report either at or prior to the open of the US session.
Europe
In Europe, the Euro Stoxx 50 index rose 0.4% while a move higher for sterling weighed on UK stocks, with the FTSE 100 closing broadly unchanged.
In fixed income, European sovereign debt sold off, with the yield on 10-year German debt rising 2bps to 0.53%. Italian and Spanish yields rose 5bps and 7bps respectively.
Asia
Japanese stocks largely extended recent gains, rising 0.1% overnight, bringing the weekly gain to close to 1%. Energy and Industrial stocks were the leading gainers overnight, both rising 1.1%.