Another mixed session in Europe turned into solid gains in the US overnight, where stocks rallied on hopes of central-bank efforts to stimulate the global economy, shrugging off concerns about Spanish bond yields rising to a euro-era high.
In London the UK’s FTSE 100 gave up 17 points (-0.3%) to settle at 5467, whilst the French CAC added 0.1% and the DAX slipped -0.2%.
European markets were mostly lower as the increase in Spanish bond yields outweighed reassuring news of reasonable demand at an auction of Italian government bonds.
Italy sold 4.5 billion euros ($5.7 billion) of bonds, the maximum it had targeted, though at much higher rates than in previous auctions.
Stateside, the Dow Jones put on 156 points (+1.2%) to settle at 12652, whilst the S&P (+1.1%) and NASDAQ (+0.6%) also enjoyed gains.
Markets rose after labor and inflation data sparked speculation the Fed will announce further economic-stimulus efforts.
The number of Americans making initial claims for unemployment benefits unexpectedly rose, while the prior week’s figure was revised higher.
Elsewhere, consumer prices fell in May in line with expectations, as plunging gasoline costs offset higher rents and medical-care prices.
Excluding food and energy, consumer prices rose 0.2% from April, also matching economists’ forecasts.
The Aussie dollar rallied and is now trading back above parity, currently buying US$1.002, whilst the US dollar fell for a second session against the yen after reports signalled a slowing US economy, boosting the case for the Fed to take more steps to bolster growth.
Crude rose the most in more than two months on speculation the Fed will loosen monetary policy to spur growth and as OPEC members were asked to cut production that exceeds their current output ceiling.
Oil for July delivery gained $1.29 to settle at $83.91 a barrel on the New York Mercantile Exchange, the biggest percentage increase since April 11.
Elsewhere, copper added 0.4% whilst bullion gained 0.3% to settle at US$1624 an ounce.
In company news, Echo Entertainment Group has announced it will raise $454 million via a fully underwritten 1-for-5 capital raising at $3.30 a share, a 27% discount the previous close.
There is no major local economic data due out for today’s session.