Global markets were collectively stronger overnight, as concern over Europe’s debt crisis eased and US factory orders topped forecasts. European stocks rose to a one-week high as trading resumed after a four-day weekend while Italian and Spanish bond yields fell.
The Cypriot government completed talks on the terms for aid with the so-called troika of officials representing the International Monetary Fund, the European Central Bank and the European Union.
Cyprus was granted two extra years, to 2018, to implement measures linked to its bailout. The accord will be discussed at a euro working group meeting of finance officials on 4 April. In London the UK’s FTSE 100 added 79 points (+1.2%) to settle at 6491, whilst the German DAX surged 149 points (+1.9%) to close at 7944.
Stateside, the S&P 500 rose 0.5% to 1,570 – a record high – whilst the Dow Jones climbed 89 points (+0.6%) to 14,662 – also a record. U.S. factory orders rose in February, boosted by a pickup in demand for motor vehicles and commercial aircraft.
The 3% gain in bookings, the biggest in five months, followed a revised 1% decline in January, a Commerce Department report showed. The median forecast of 64 economists in a Bloomberg survey called for a 2.9% rise.
Crude rose as equities surged after data showed U.S. factory orders exceeded forecasts, signalling increasing economic growth and fuel demand. Oil for May delivery climbed 12 cents to settle at $97.19 a barrel on the NYMEX.
Copper futures fell for a third straight session in New York as record unemployment in Europe added to concern that demand will weaken, amid signs of slowing growth in China and rising stockpiles of the metal.
The euro fell against 12 of its 16 most-traded peers as a report showed unemployment in the currency bloc climbed to a record in February, adding to concern the economy will struggle to emerge from recession.
Today’s session will bring us the latest Trade Balance data (11:30am, AEST) and HIA new home sales (tentative).