By IFCMarkets
US stock indices closed at record highs on Monday on expectations of positive earnings season. The dollar resumed strengthening: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.2% to 93.251. S&P 500 closed 0.2% higher settling at record 2557.64 led by financial shares. The Dow Jones industrial average rose 0.4% to 22956.96. The Nasdaq composite index gained 0.3% to 6624.
Treasury yields rose after Fed chair Yellen on Sunday said “ongoing strength of the economy would warrant gradual increases” in short term interest rates. The dollar was also supported by President Trump’s comment he expected that tax policy reforms would be completed by year end. Economic news also were positive: The Empire State manufacturing index jumped to a three-year high of 30.2 in October from 24.4 in September. A number above zero indicates improving economic conditions.
European stocks ended little changed on Monday as Spain’s central government gave Catalonia’s separatist leaders until Thursday to back away from the independence push. Both the euro and British Pound fell against the dollar. The Stoxx Europe 600 index ended less than 0.1 points lower. The DAX 30 added 0.1% to 13003.70. France’s CAC 40 rose 0.2%. UK’s FTSE 100 fell 0.1% to 7526.97.
Spanish stocks fell as uncertainty over Catalonia’s independence push continued after Catalonia President Puigdemont didn’t answer Spain’s Prime Minister’s demand last Wednesday he provide a clear answer whether the region declared independence. Puigdemont instead called for two months of talks to discuss Catalonia’s break from Spain said in a letter to Rajoy. In a response letter Rajoy said he would set in motion a constitutional process toward removing Catalonia’s autonomy if its leaders did not drop the push for independence. Spain’s deputy prime minister Soraya Saenz de Santamaria gave Catalonia leader Puigdemont until 10 am local time Thursday to drop any plans to secede from Spain.
Asian stock indices are mostly higher today. Nikkei closed 0.4% higher at 21336.12 as yen extended losses against the dollar. Chinese stocks are mixed after data on Monday showed consumer inflation slowed while producer prices rose more than expected: Shanghai Composite Index is 0.2% lower while Hong Kong’s Hang Seng Index is flat. Australia’s All Ordinaries Index is up 0.7% supported by gains in miner stocks on higher commodity prices and a slide in Australian dollar against the greenback.
Oil futures prices are inching higher today as uncertainty after Iraqi Kurdistan independence vote raises concerns about Iraq’s crude oil exports. Prices rose Monday after Iraqi forces reportedly seized the city of Kirkuk and its surrounding oil fields from Kurdish forces Monday. The government said its troops had taken control of Iraq’s North Oil Company, and the fields quickly resumed production. December Brent crude rose 1.1% settling at $57.82 a barrel on ICE Futures exchange in London on Monday.
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