Dollar struggles, shares as trade data sets sentiment.

LONDON, Jan 24 (Reuters) – The euro hit a nine-month high against the dollar and global stocks on Tuesday, boosted by tepid European business data and a slew of corporate earnings.

Eurozone business activity posted a surprise increase in January, the latest sign that a recession in the bloc may not be as severe as feared, a survey showed.

S&P Global’s flash Composite Purchasing Managers’ Index (PMI) rose to 50.2 this month from 49.3 in December.

Britain’s flash composite Purchasing Managers’ Index (PMI) fell to 47.8 in January from 49.0 in December, the lowest since January 2021.

The MSCI World Index (.MIAPJ0000PUS) was 0.1% higher, touching a fresh seven-month high, after Europe’s broad Stoxx 600 index (.STOXX) gained in the U.S. overnight and parts of Asia during the day.

The MSCI world index has increased by about 7% at the beginning of this year, thanks to the central banks’ program to increase interest rates worldwide, as well as optimism supported by economic data.

Britain’s FTSE 100 (.FTSE) fell 0.4%, underperforming the broader European market, and domestically-focused mid-caps (.FTMC) gave up early gains to trade near flat after PMI data.

Most Asian markets were closed for a second day on the Lunar New Year, but Japan’s Nikkei (.N225) closed at a more than one-month high, recovering all losses since the Bank of Japan’s surprise policy change last month. Australian shares also rallied. (.AXJO)

We are still focused on the federation at the moment with the meeting coming up next week. The market is very optimistic that there will be two rate cuts by the end of the year and I think that’s what’s driving the sentiment. CITIndex analyst Fiona Sinkota said.

“We’re looking at US PMIs today,” she added.

The Federal Reserve’s rate policy committee will begin its two-day meeting on February 1. Inflation has begun to ease in recent months, and signs that the US economy is slowing could prompt the Fed to reconsider its next move after a rate hike. last year.

On the corporate earnings front, today’s heavyweight Microsoft will report earnings after the market closes.

Results in the United States and Europe will help guide investors on whether renewed optimism about the economy, which has buoyed equities in recent weeks, is warranted.

Expectations of a better economic outlook in Europe also weighed on currency markets, and with comments from the US Federal Reserve easing faster than the European Central Bank, it continued to support the euro and other neighboring currencies.

The European common currency was steady at $1.0865, up from a nine-month high of $1.0927 a day earlier. Sterling turned negative after the British data and fell 0.25% to $1.234, retreating from Monday’s seven-month high.

That left the dollar index at 102.04, near a six-month low.

Globally, government bonds fell 3 basis points to 3.4913%, the lowest in the US 10 year Treasury. Germany’s 10-year yield fell 1 basis point to 2.18 percent.

Products, on the contrary, move to prices.

Oil was largely held up by recent gains from optimism surrounding China’s reopening. Brent crude was down 0.1% at $88.1, off Monday’s eight-week high of $89.09.

Gold rose 0.2%, earlier hitting a new nine-month high, as the precious metal continued to be supported by a weaker dollar.

Edited by Christina Fincher

Our Standards: The Thomson Reuters Trust Principles.

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