World stocks, dollar under pressure after soft US data

The Standard & Poor's 500 index climbed 20.06 points, or 0.9 percent, to 2,349.01.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.15 percent lower.

A raft of Chinese economic data beat market expectations but did not produce notable market reactions as investors had been already optimistic following a recent string of positive China numbers.

Note: The world's second-biggest economy accounted for about one-third of global growth last year and, given the strong Q1, is on track to contribute at least as much this year. The pan-European STOXX 600 index, which hit 16-month highs last week, was down 0.6 per cent, led lower by the basic resources and oil and gas sectors as commodity prices dropped. China's economy expanded faster than expected in the first quarter as higher government infrastructure spending and a property boom helped boost industrial output by the most in more than two years.

USA stocks regained some ground after the recent global risks had weighed on the market last week.

European shares fell and the dollar dipped against the yen on Tuesday as tensions over North Korea and the coming weekend's knife-edge presidential election in France kept investors nervous.

Current Fed fund futures for June are now pricing in less than a +50% chance of a rate hike in its June 13-14 meeting for the first time in about a month.

The U.S. dollar retreated to 108.14 yen, its lowest since mid-November before recovering some ground to trade down 0.13 at 108.47 yen.

While praising China for stepping up efforts to rein in its neighbour and ally, Pence and South Korea's acting president, Hwang Kyo-ahn, said they would proceed with the early deployment to South Korea of the U.S. THAAD missile-defence system, in spite of China's objections.

"But this is also thought to be a part of a barter, namely the US wants China to take tougher actions against North Korea in exchange", he said.

Increasing geopolitical risks another notch, North Korea on Sunday made what was believed to be a failed missile test launch.

"Gold and the Japanese yen have both weakened a little in Asian trading, suggesting that markets are taking a wait-and-see attitude towards geopolitical risk and the situation in North Korea".

Copper was down 0.6 per cent at $$5,655 a tonne Gold was marginally higher on the day at $1,283 an ounce, having touched a five-month high of $1,295 on Monday.

The dollar rose to 109.20 yen early Tuesday from rates in the mid-108 yen range seen before news on Mnuchin's remarks came out. Abbott agreed to buy Alere more than a year ago for $56 per share, or $5.8 billion, but filed a lawsuit to end the deal after Alere recalled a key product, delayed filing a financial statement, and faced an investigation into its business outside the U.S.

The kiwi dollar rose to 76.39 yen as at 8am in Wellington from 76.05 yen late on Monday and from 76.19 yen last Thursday, before the four-day Easter holiday.

But French yields later fell while German yields edged up and the spread with Germany narrowed to its tightest in a week after an opinion poll put centrist Emmanuel Macron first in the first round of voting, just ahead of far-right, anti-euro candidate Marine Le Pen, with a bigger gap to far-left representative Jean-Luc Melenchon. It had traded as low as $31.47 last July as investors anxious the deal would fall apart. The Canadian dollar strengthened against a broadly weaker US currency on Monday as oil prices held near recent highs and investors returned from a long weekend to strong Chinese growth data and softer USA numbers. The contract lost 53 cents, or 1 percent, to settle at $52.65 a barrel on Monday.

  • Zachary Reyes