Stabilising oil lifts shares and bond yields
By David Gaffen
NEW YORK (Reuters) - Stocks rose around the world and bond yields edged up on Tuesday as oil rebounded from 11-year lows on prospects for lower temperatures on both sides of the Atlantic.
The fall in oil prices has been a major driver of financial markets this year, hammering energy companies, lowering inflation expectations and reinforcing bets on loose monetary policy in Europe and a slow tightening in the United States.
U.S. West Texas Intermediate (WTI) futures (CLc1) were up $1.06 to $37.86 per barrel, rebounding from a more than 3 percent fall on Monday. Brent, the international benchmark (LCOc1), was at $37.83 per barrel, up $1.21, putting it a bit less than two dollars away from an 11-year low hit earlier in December.
This lifted shares on Wall Street and in Europe. The S&P 500 Index gained 1.1 percent to 2079.31, led by healthcare and financial shares, while the pan-European FTSEurofirst 300 index (.FTEU3) rose 1.5 percent and the euro zone's blue-chip Euro STOXX 50 index advanced 1.8 percent. [.EU] The MSCI All-World Index gained 1 percent.
Britain's blue-chip FTSE 100 index (.FTSE), opening for the first time since the Christmas break, rose 1 percent.
U.S. Treasuries sold off as equities improved and after a disappointing auction of five-year notes. The two-year Treasury yield rose to its highest since 2010, and was lately yielding 1.11 percent.
The U.S. 10-year Treasury yield rose 9 basis points to 2.31 percent, while German 10-year Bund yields , the benchmark for euro zone borrowing costs, rose 8 basis points to 0.64 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent. But it remained on track to mark a loss of around 12 percent for 2015, a year that saw it log a more than seven-year high in April.
China's blue-chip CSI300 index added 0.9 percent, while the Shanghai Composite Index (.SSEC) closed up by a similar amount, as the central bank vowed to maintain reasonable credit growth and keep the yuan stable.
China's yuan fell to 6.5805 against the dollar in offshore trading (CNH=D3), its weakest since a hefty devaluation in August, mirroring a fall in onshore rates, with traders citing strong year-end dollar demand. It later firmed a bit to 6.5774.
The euro dipped 0.3 percent to $1.0934 (EUR=).
(Additional reporting by Sudip Kar-Gupta and Marius Zaharia in London and Lisa Twaronite and Shinichi Saoshiro in Tokyo; Editing by Nick Zieminski)
