World stocks scaled fresh record highs on Friday, while the dollar stuck near four-month lows before crucial payroll numbers that could underpin growing confidence in the world’s biggest economy.
Global equity markets have begun 2018 with their best week in more than a year, continuing last year’s rally that has seen volatility plunge and investors’ appetite for risk surge.
Data on Friday showing euro zone inflation slowing in December will also help bulls stay convinced central banks are not going to tighten monetary policy faster than expected.
MSCI’s gauge of stocks across the globe .MIWD00000PUS was up 0.19 percent, above 524 points and at a record high. The Swiss benchmark rose to an all-time high, and the British index moved to another record, supported by optimism over regional economic strength and gains in U.S. stocks overnight.
The pan-European STOXX 600 index was up 0.4 percent, holding at a two-month high. The first trading week of 2018 looks set to be the best for Euro zone stocks .STOXXE since May, as shares shrug off a stronger single currency.
“There is little impediment for continued gains whilst economic conditions that we’ve seen over the last few months continue, and there’s every reason to expect that to continue to be the case,” Ken Odeluga, market analyst at City Index, said.
Emerging market stocks .MSCIEF have had their best start to the year since 2006 and added to those gains on Friday.
The U.S. dollar failed to draw much strength from better-than-expected private payrolls data on Thursday and manufacturing numbers earlier this week, leaving the greenback around a four-month low against the euro.
Euro zone prices grew by 1.4 percent in December on a year earlier, a slower rate than in the previous month. That provides support for the European Central Bank’s decision to keep policy easy despite growing pressure from richer euro zone countries.
Still, with two U.S. interest rate hikes already baked into market expectations, traders believe there is more upside room for the euro as the ECB may move to rein in its monetary largesse faster than the market anticipates.—Reuters