Global stocks extended their rally on Friday, following Wall Street higher after the minutes of the Federal Reserve’s September policy meeting played to expectations that US interest rates would not be raised this year.
Asian stocks rallied across the board, led by a nearly 300-point gain for the Nikkei 225. Tokyo’s benchmark has gained in seven of the past eight sessions. On Friday all but nine of its 225 members ended higher.
Chinese stocks were also up on Friday, with the Shanghai Composite Index adding 1.3%. The CSI 300, which tracks stocks in Shanghai and Shenzhen, closed up 1.3%.
Hong Kong’s Hang Seng Index rose more than 100 points or 0.5%.
European stocks also advanced, with London’s FTSE 100 Index climbing 1.1%. In Germany, the DAX climbed 1.3%.
The pan-European STOXX 600 Index was up 0.8%.
Wall Street stocks broke higher on Thursday, with the Dow Jones posting another triple digit gain. The benchmark gauge closed above 17,000 for the first time since August. US stock market volatility (VIX) declined to its lowest level since August 19.
Global equities were supported after the minutes of the September Federal Open Market Committee (FOMC) meetings revealed that policymakers were still concerned about low inflation and global economic volatility. Although most officials indicated they were still on course to begin raising rates this year, markets are skeptical that domestic growth is strong enough to warrant a change in policy. The US economy is forecast to have expanded less than 2% annually in the third quarter.
The Fed voted 9-1 to keep rates unchanged in September. The FOMC has just two policy meetings left this year.
Commodity prices continued to trend higher on Friday, with US crude on pace for its biggest weekly gain since March 2009. The West Texas Intermediate (WTI) benchmark for US crude traded up $1.01 or 2% to $50.44 a barrel on the New York Mercantile Exchange. The US contract opened the week below $46 a barrel.
Global benchmark Brent crude traded up 51 cents or 1% at $53.66 a barrel on the ICE Futures Exchange in Europe. Brent has gained more than $5 since Monday.
Gold futures also tested monthly highs on Friday. Gold for December delivery, the most actively traded contract, rose $9.10 or 0.8% to $1,153.40 per troy ounce. The yellow metal has rallied $40 since the start of the month.
Based out of Toronto, Canada, Husni Sam Borji is senior macroeconomics analysts who contributes regularly to TradersDNA, where he examines the global financial markets. Husni Sam has authored dozens of government reports and industry whitepapers, as well as thousands of financial articles. Husni Sam holds a BA from the University of Windsor and a Master’s degree in Economic Public Policy from McMaster University.
His expertise includes macroeconomics, fundamental analysis, industry research and global political economy.