Global stocks near record high

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The FTSE All-World equity index is up 0.1% to 278.2, just short of its October 2007 record of 279.1. European stocks are also approaching a six year high, according to a report in today’s Financial Times.

Industrial commodities are showing signs of strengthening, with Brent crude oil up 10 cents to £108.93, although copper is down to £108.93 – a dip of 0.5%. After a four month low, gold prices have crept up £2 to £1246 an ounce. Analysis by Forbes suggests that prices have been stabilised by the dollar index, which is struggling to push past 80.59 after a 3 month high.

Overall, the US economy is thought to be gaining momentum. On Friday, investors will receive the May non-farm payrolls report, giving the Federal Reserve a clearer idea of the health of the job market and influencing whether or not rates are raised. Tapering of the asset purchase programme is expected to continue following the Federal Reserve’s rate meeting in a fortnight’s time. US 10-year Treasury yields are down 1 basis point to 2.52%. In Europe, UK 10-year gilt yields have stayed at a steady 2.62%, the Euro is up 7 pips and the Pound up 4, to £1.3601 and £1.6749 respectively.

Monetary easing by the European Central Bank (ECB) is expected to continue this Thursday, triggering a loss of 1 basis point on German 10-year Bund yields, now at 1.36%. At a press conference last month, ECB President Mario Draghi stated that, although a decision had not yet been reached, “there is consensus or unanimity in not being resigned to the present low inflation for a too long, too protracted a time.” He also said that the ECB was prepared to “act swiftly, if required, with further monetary policy easing.”