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World shares took a fresh run at record highs on Thursday, as all the right mess...
LONDON - World shares took a fresh run at record highs on Thursday, as all the right messages from the U.S. Federal Reserve set traders up nicely for a packed day of milestone central bank meetings and a Brexit-defining election in Britain.
FILE PHOTO: A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu province, China February 13, 2019. REUTERS/Stringer/File Photo The Fed kept U.S. interest rates unchanged, as expected, but it was a message that it would take an unexpected and “persistent” rise in inflation to lift them again that buoyed the bulls and shoved the dollar to its lowest since August. It helped Asian shares rally almost 1%, despite reports Washington will press on with new China tariffs, and solid 0.2%-0.5% gains in Europe early on left MSCI’s broadest index of world shares .MIWD00000PUS just 0.1% shy of its January 2018 all-time high. “The Fed’s accommodative stance does support equities, but the chance of a disruptive election outcome in Britain is very real,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. Traders are bracing for a series of make-or-break events over the next few days that have the potential to cause huge swings in financial markets for months to come. Sterling was hovering at its highest in more than two years versus the euro and close to an eight-month high versus the dollar as voting began in an election that will determine whether Britain exits the European Union next month. Expectations are that the ruling Conservatives, led by Boris Johnson, will score a majority that allows his Brexit deal to be passed by a new parliament, but the latest polls have shown the lead shrinking. Exit polls for Britain’s election will begin around 2200 GMT, after voting closes, with clarity over whether their will be a clear winner or another hung parliament likely between 0400 GMT and 0600 GMT. Following a 10% surge by the pound in the last few months, Traders and investors are now hedging their bets. Union Bancaire Privée’s Global Head of Forex Strategy Peter Kinsella said a Conservative majority remained his expectation, however. “We think a move to levels of around $1.35 or even $1.37 is entirely feasible,” if there is a decent Conservative majority, whereas with another hung parliament “you are definitely back down to $1.26-1.27.”, just shy of its highest since March and close to a May 2017 peak against the euro at 84.32 pence EURGBP=.
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