Dipping US index futures are helping pull European shares back from highs, though Chinese stocks hit a near seven-year peak and
Japanese equities reached their best level in 15 years as global
monetary policy continues to attract traders' attention.
Industrial commodities are mostly weaker, the greenback is way softer and Treasury prices are stronger amid jitters ahead of the start of the Federal Reserve’s two-day strategy meeting.
On Wednesday, Janet Yellen, Fed's chief, is expected to lay the groundwork for the first US interest rate rise in nine years this summer, but is likely to stress any decision remains dependent on the data.
Recent US economic updates have not been as upbeat as forecast,
however, and this has helped push the dollar back from 12-year highs.
Benchmark 10-year bond yields are down 4 basis points to 2.06 per cent and 2-years are easing 1bp to 0.65 per cent as investors slightly trim the chances of a June rate rise.
Futures action suggests Wall Street’s S&P 500 will shed 12 of the 28 points added on Monday, tracking a 1.7 per cent fall for Brent crude to $53.01 a barrel.
This is adding to drops across the Atlantic, with the FTSE Eurofirst 300 retreating 0.8 per cent from its best close since October 2007, even as London-listed resources groups shrug off weakness in commodities and have a mildly positive session.
An explosive rally for German stocks has been powering the Eurofist, being the result of falling energy costs and European Central Bank policy.
The ECB’s €1.1tn quantitative easing programme has crushed the euro, helping the continent’s exporters, and suppressed bond yields, ensuring equities appear more attractive.
According to Bloomberg data, the German 10-year Bund yield is 0.28 per cent, down a fraction of a
basis point on the day, while the Eurofirst sports a trailing dividend
yield of 3.2 per cent. But when Germany’s Xetra Dax index closed on Monday at a record high
above 12,000, it left its 14-day relative strength index, a momentum
gauge, at 82.9.
The Bank of Japan maintained its Y80tn ($659bn) asset-buying scheme helping Tokyo's Nikkei 225 add 1 per cent to its highest since April 2000.
The Shanghai Composite rose 1.6 per cent, a fifth straight day of gains that took the Chinese benchmark to its best close since May 2008 as investors increasingly expect policy makers to act to keep the economy on track.
Premier Li Keqiang on Monday suggested Beijing had plenty of ammunition to ensure China would hit its growth target this year.
Though recent economic data
have been disappointing, investors are optimistic that policy reforms
will drive growth and keep the equity markets humming. Data last week
already showed banks had been spurred to ramp up lending following
various easing steps from China’s central bank.
