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GLOBAL MARKETS: The prospect of cheap money boosts stocks and oil soars after a cyberattack

By Danilo Masoni and Stanley White

MILAN, May 10 (Reuters) – Global stocks reached new highs on Monday on forecasts that interest rates will remain low and the economy will continue its recovery, while oil prices rose after a cyberattack a US pipeline operator would disrupt the markets.

The MSCI Index of World Stocks hit a new high and was up 0.1% at 0740 GMT, driven by overnight gains in Asian markets and a stable open in Europe.

Europe’s regional STOXX 600 index,, was up 0.1% in early trading, while the broader MSCI index of Asia-Pacific stocks outside of Japan, was up 0.4%. S&P 500 futures were flat, while Nasdaq NQc1 futures were down 0.5%.

US nonfarm payroll data showed on Friday that job growth slowed much more than expected in April, in an unexpected release that boosted equities but pushed down the dollar and Treasury yields. Americans.

“A statistical coincidence and / or a temporary pause in labor market demand is likely to blame for this report. However, the Federal Reserve cannot afford to adjust policy without concrete evidence of a further recovery in the labor market.” said Natixis economist Troy Ludtka.

On Friday, the Dow Jones Industrial Average and the S&P 500 rose to record highs at the close as disappointing data on the US labor market eased concerns about a rebound in consumer prices.

In recent weeks, some investors had embraced the possibility that a robust US economic recovery from the coronavirus pandemic would force the Federal Reserve to tighten its monetary policy earlier than the central bank had anticipated.

However, the unfavorable report on non-farm payrolls caused a rapid reversal in some of these operations, which spread to equities, bonds and major currencies.

US President Joe Biden said after the report that the figures showed the economy was not in danger of overheating and underscored how vital his administration’s economic measures are.

“In the end, it’s the best of all possible worlds for equities: a robust economy, strong earnings, but no tightening of monetary policy and with more fiscal spending on the way,” said Giuseppe Sersale, fund manager at Anthilia in Milan. .

The focus is now on US consumer price data to be released on Wednesday, which will help investors determine whether they need to lower their inflation expectations further.

The dollar index against a basket of six major currencies was up 0.17% to 90.301, but was just above its low since February 25, reached earlier in the session.

The British pound reached its highest value in more than two months against the dollar, but traders said concerns over independence tension in Scotland could dampen gains in the pound.

In the cryptocurrency market, ether rose 5% to a new record above $ 4,000. Its biggest rival, Bitcoin, rose 1% to $ 58,862.

The benchmark 10-year US Treasury yield was about 1 basis point to 1.597%, after falling to a two-month low of 1.469% on Friday.

Oil prices rose after a cyberattack took out of service a US pipeline operator that supplies nearly half of the fuel on the US East Coast.

Brent crude rose 0.5% to $ 68.64 a barrel, as the supply disruption in the United States affected energy markets, while US crude rose 0.5% to 65, $ 23 a barrel.

On Sunday, the White House announced its close collaboration with America’s leading fuel pipeline operator, Colonial Pipeline, to help it recover from a “ransomware” attack that forced the company to shut down its main fuel pipelines.

Copper prices reached record highs on the hope that demand will improve in a context of reduced supply. Three-month copper on the London Metal Exchange rose to $ 10,747.50 a ton at the beginning of the session before declining slightly.

(Reported by Danilo Masoni in Milan and Stanley White in Tokyo; edited by Emelia Sithole-Matarise; translated by Flora Gómez in the Gdansk newsroom)

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