PHOTO
* Europe pushes higher as DAX hits year to date high
* US dollar supported after solid manufacturing survey
* Wall St expected to tick higher on upbeat earnings, M&A frenzy
* Oil drifts lower but steel, industrial commodities on the rise
By Marc Jones
LONDON, Oct 25 (Reuters) - World markets had a swagger about them on Tuesday as upbeat economic data and signs of a revival in inflation pushed up stocks and commodity prices and kept the dollar at a nine-month high.
Wall Street
ESc1
was set to tick higher with consumer confidence figures due and analysts already tucking into healthy-looking earnings from Procter & Gamble, General Motors and drugs giant Merck, but also a profit downgrade from Caterpillar.
.N
ECONG7
Europe had been cheered as Germany's Dax
.GDAXI
hit its highest level of the year after the closely-watched Ifo survey beat expectationsa day after purchasing manager numbers had done the same.
The region's mining firms
.SXPP
were the standout performers though. They hit a 14-month top as zinc surged to a five-year peak and iron ore reached its highest since mid-2014, all of which should pick up the pulse of inflation globally.
"We are seeing a pick-up of economic activity against the backdrop of only one central bank - the Fed - that is likely to tighten policy and that is supporting asset markets," said CMC Markets senior analyst Michael Hewson.
In foreign exchange markets, the dollar
.DXY
took a breather having reached its highest since early February against other top currencies as traders continued to add to the bets on a December U.S. interest rate rise
0#FF:
.
/FRX
China's yuan
CHH=D3
went the other way, hitting its lowest since "offshore" trading was introduced in 2010 as Beijing nudged down official rates again
CNY=PBOC
.
It traded as soft as 6.7882 yuan per dollar. The currency's fall of more than 1.5 percent since the end of September has stirred renewed suspicion of a possible extended slide in the yuan, even though officials have reiterated their expectations for a stable currency.
urn:newsml:reuters.com:*:nL4N1CV066
But the weakness has revived memories of a shock yuan devaluation last August and another rapid depreciation early this year - falls that triggered a bout of global market turmoil.
Analysts pointed out, however, that during this round of yuan weakness, global risk sentiment was holding up.
"That highlights the extent to which dollar gains are unlikely to be as extended as they were (in the past)," said BNP Paribas currency strategist Sam Lynton-Brown, in London.
GOLDEN MINERS
The cheer around the mining sector was increased further as a production update thrust London-listed giant Anglo American's shares
AAL.L
up over 3 percent to take their gains this year to almost 270 percent.
The staggering rise has made Anglo the top performing stock on Europe's STOXX 600
.STOXX
this year.
In Asia, Japan's Nikkei
.N225
rose 0.7 percent to close at a six-month high as a softening yen burnished the outlook for the country's exporters. Australian stocks
.AXJO
added 0.6 percent and Taiwan
.TWII
0.7 percent.
Wall Street was taking encouragement from upbeat corporate results. Over one third of U.S. companies have now reported and 80 percent have beaten market expectations.
Another third of the S&P 500 components are scheduled to report earnings later this week, including heavyweights Apple
AAPL.O
, Alphabet
GOOGL.O
, Amazon
AMZN.O
and Boeing
BA.N
.
Merger and acquisition activity added extra fizz in the wake of AT&T Inc's
T.N
$85.4 billion bid for Time Warner Inc
TWX.N
, though the deal seemed destined to face stringent scrutiny from regulators.
Safe-haven bonds were feeling the strain of the bullish mood elsewhere with U.S. Treasury yields up to almost 1.78 percent again and European yields creeping higher.
GVD/EUR
In commodities, oil prices briefly dipped on news of the impending restart of Britain's Buzzard oilfield and Iraq's wish to be exempted from OPEC production cuts.
Brent
LCOc1
was down 5 cents at $51.41 a barrel, while U.S. crude
CLc1
hovered at $50.50.
But going the other way were metals with zinc
CMZN3
, nickel
CMNI3
, copper
CMCU3
and tin
CMSN3
all shining and Chinese iron ore futures reaching their highest since August 2014.
MET/L
Coal prices also reached new peaks after weeks of gains, a prop for the Australian dollar
AUD=D4
as the two commodities are the country's biggest export earners.
Another mover was the Canadian dollar which rebounded from a seven-month low after Bank of Canada Governor Stephen Poloz said the decision on whether to cut interest rates again was not one to take lightly.
The comments countered recent speculation about an imminent easing and nudged the U.S. dollar down to C$1.3333
CAD=D4
from a peak at C$1.3398. (Additional reporting by Wayne Cole in Sydney; Editing by Mark Heinrich) ((marc.jones@thomsonreuters.com; +44)(0)(207 542 9033; Reuters Messaging: marc.jones.thomsonreuters.com@reuters.net Twitter @marcjonesrtrs))
* US dollar supported after solid manufacturing survey
* Wall St expected to tick higher on upbeat earnings, M&A frenzy
* Oil drifts lower but steel, industrial commodities on the rise
By Marc Jones
LONDON, Oct 25 (Reuters) - World markets had a swagger about them on Tuesday as upbeat economic data and signs of a revival in inflation pushed up stocks and commodity prices and kept the dollar at a nine-month high.
Wall Street
Europe had been cheered as Germany's Dax
The region's mining firms
"We are seeing a pick-up of economic activity against the backdrop of only one central bank - the Fed - that is likely to tighten policy and that is supporting asset markets," said CMC Markets senior analyst Michael Hewson.
In foreign exchange markets, the dollar
China's yuan
It traded as soft as 6.7882 yuan per dollar. The currency's fall of more than 1.5 percent since the end of September has stirred renewed suspicion of a possible extended slide in the yuan, even though officials have reiterated their expectations for a stable currency.
But the weakness has revived memories of a shock yuan devaluation last August and another rapid depreciation early this year - falls that triggered a bout of global market turmoil.
Analysts pointed out, however, that during this round of yuan weakness, global risk sentiment was holding up.
"That highlights the extent to which dollar gains are unlikely to be as extended as they were (in the past)," said BNP Paribas currency strategist Sam Lynton-Brown, in London.
GOLDEN MINERS
The cheer around the mining sector was increased further as a production update thrust London-listed giant Anglo American's shares
The staggering rise has made Anglo the top performing stock on Europe's STOXX 600
In Asia, Japan's Nikkei
Wall Street was taking encouragement from upbeat corporate results. Over one third of U.S. companies have now reported and 80 percent have beaten market expectations.
Another third of the S&P 500 components are scheduled to report earnings later this week, including heavyweights Apple
Merger and acquisition activity added extra fizz in the wake of AT&T Inc's
Safe-haven bonds were feeling the strain of the bullish mood elsewhere with U.S. Treasury yields up to almost 1.78 percent again and European yields creeping higher.
In commodities, oil prices briefly dipped on news of the impending restart of Britain's Buzzard oilfield and Iraq's wish to be exempted from OPEC production cuts.
Brent
But going the other way were metals with zinc
Coal prices also reached new peaks after weeks of gains, a prop for the Australian dollar
Another mover was the Canadian dollar which rebounded from a seven-month low after Bank of Canada Governor Stephen Poloz said the decision on whether to cut interest rates again was not one to take lightly.
The comments countered recent speculation about an imminent easing and nudged the U.S. dollar down to C$1.3333