Stocks rally with Asian currencies on Fed bets

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Stocks rally with Asian currencies on Fed bets
Brokers sit in front of their screens at the stock exchange in Frankfurt am Main, western Germany, on July 20, 2015 as focus remained firmly on Greece, where banks reopened after a three-week shutdown imposed to prevent a run on ATMs from crashing the financial system. Greece has begun making a 4.2 billion euro ($4.6 billion) payment due to the ECB as well as outstanding sums due to the International Monetary Fund (IMF) according to a ministerial source.

London - The probability of a Fed increase by the December policy meeting has dropped to 27 per cent, down from 70 per cent at the start of August, according to futures data compiled by Bloomberg.

By Bloomberg

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Published: Fri 16 Oct 2015, 5:08 PM

Stocks rose around the world and emerging-market currencies advanced as weak economic data globally sent the odds of the Federal Reserve increasing interest rates this year to a record low.
The MSCI All Country World Index climbed for the first time in three days and developing-nation shares headed for the highest close since August as the prospect of lower Fed rates for longer boosted demand for riskier assets. The ringgit, won and rupiah strengthened more than 1.4 per cent as the Fed speculation weighed on the dollar. While Treasuries declined, the 10-year note yield was below two per cent.
Economic data from Group of 10 nations are missing analysts' estimates by the most in four months, according to a Citigroup index, including weaker-than-expected US retail sales, and slowdowns in Japan, China, the UK and Germany. That's caused investors to almost rule out a Fed rate increase this year, and helped cut global bond yields to a five-month low.
The MSCI All-Country World Index climbed 0.7 per cent at 11:42am in London. The gauge has lost about five per cent since the end of June weighed down by the collapse of China's equity bubble, the shock devaluation of the yuan and slowing growth globally.
The Stoxx Europe 600 Index rose 1.2 per cent, led by technology and financial companies. Unilever climbed 3.9 per cent in London after boosting its full-year sales forecast. Supermarket operator Casino Guichard Perrachon jumped as much as 10 per cent as quarterly sales rose more than projected. Burberry Group tumbled 12 per cent after reporting lower sales in Asia and indicating that full-year profit will probably decline for the second year.
Standard & Poor's 500 Index E-mini futures expiring in December rose 0.7 per cent after the gauge slid for two days. Netflix fell 3.5 per cent in early New York trading after third-quarter US subscriber growth missed analysts' estimates.
Goldman Sachs Group, Citigroup and Philip Morris International are among 13 S&P 500 companies reported earnings on Thursday.
Bloomberg's dollar index slipped 0.1 per cent, as the greenback weakened against most major peers. The gauge earlier touched the lowest level since June 30. The yen rose as much as 0.6 per cent to 118.10 per dollar, the strongest in more than six weeks. The Japanese currency has risen about 1.6 per cent this week.
The New Zealand dollar added as much as 1.6 per cent to 68.97 US cents, the highest since June 26. The currency surged 2.2 per cent on Wednesday, its best one-day performance since March. Australia's dollar rose a second day, strengthening 0.6 per cent to 73.45 cents.
The euro retreated from a seven-week high versus the dollar, after European Central Bank policy maker Ewald Nowotny said the institution is "clearly missing" its inflation targets. The shared currency fell 0.3 per cent to $1.1435, after earlier climbing to $1.1495, the strongest since Aug. 26.
The probability of a Fed increase by the December policy meeting has dropped to 27 per cent, down from 70 per cent at the start of August, according to futures data compiled by Bloomberg.
The MSCI Emerging Markets Index advanced 2.1 per cent, the first gain in three days. Benchmark equity gauges in China, South Korea, Turkey, Thailand and the Philippines climbed at least 1 per cent.
The Shanghai Composite Index added 2.3 per cent and the Hang Seng China Enterprises Index rose 2.1 per cent in Hong Kong. A Chinese plan to reorganize the telecom industry raised speculation the government will accelerate reforms of state- owned companies to revive economic growth.
Indian stocks climbed for the first time in four days, led by automakers and industrials, as weak economic data from around the world reduced the odds of the US Federal Reserve raising interest rates this year.
The S&P BSE Sensex jumped 0.9 per cent to 27,010.14 at close in Mumbai, ending three days of losses. The MSCI Asia Pacific Index rose for the first time in three days as all major Asian equity indexes advanced as the odds of the Fed raising borrowing costs in 2015 have fallen to the lowest since March. Global funds have bought $386 million of local shares so far this month, after pulling a combined $3.5 billion in August and September.



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