GLOBAL MARKETS-Euro extends rally on ECB comments; oil surges

By Reuters / June 08, 2018 / in.investing.com / Article Link

* Euro jumps as investors bet on ECB stimulus wind-down

* U.S. Treasury yields slip

* S&P 500 index little changed in midday U.S. trading (Updates with U.S. markets, changes dateline, previous LONDON)

By Caroline Valetkevitch

NEW YORK, June 7 (Reuters) - The euro climbed to a 3-week peak on Thursday as expectations mounted that the European Central Bank will signal an early wind-down of stimulus, while oil prices jumped on concern about a drop in Venezuela exports.

The ECB, at its policy meeting next week, will debate whether to end bond purchases later this year, its chief economist, Peter Praet, a close ally of President Mario Draghi, said on Wednesday. Other ECB officials echoed Praet's sentiment. comments drove the euro to $1.1840 EUR= , the highest since May 17. The single European currency has risen for four straight sessions. Since hitting a 10-month low last week, it has gained nearly 3 percent.

The euro EUR= was up 0.42 percent to $1.1823. The dollar index .DXY , tracking the unit against a basket of major currencies, fell 0.34 percent.

"Any signal next week that the bank plans to go ahead with winding down its asset purchases in the fall could add to the euro's broadly improved tone," said Omer Esiner, chief market analyst, at Commonwealth Foreign Exchange in Washington.

Oil prices received a boost from worries over a steep drop in exports from Venezuela, which faces the threat of U.S. sanctions and is in the midst of an economic crisis. crude CLcv1 rose 1.62 percent to $65.78 per barrel and Brent LCOcv1 was last at $76.79, up 1.9 percent.

That helped energy shares on Wall Street, with the S&P 500 energy index .SPNY last up 1.7 percent and the biggest percentage gainer among sectors. stock indexes were mixed, as a rally in tech stocks ended and set up the Nasdaq for its first loss in five days, while a jump in McDonald's shares MCD.N boosted the Dow.

The Dow Jones Industrial Average .DJI rose 131.14 points, or 0.52 percent, to 25,277.53, the S&P 500 .SPX lost 0.46 points, or 0.02 percent, to 2,771.89 and the Nasdaq Composite .IXIC dropped 47.46 points, or 0.62 percent, to 7,641.78.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.13 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS edged up 0.07 percent.

Investors were focused on an upcoming G7 summit of seven major economies, amid a widening divide over trade between U.S. President Donald Trump and the group's remaining six members.

Trump stuck to his tough trade stance against top allies at the G7 summit, which takes place on Friday and Saturday in Charlevoix, Quebec, after imposing tariffs on steel and aluminum imports from Canada, Mexico and the European Union last week.

Most U.S. Treasury yields fell, with 10-year yields holding below 3 percent, amid the trade tension between United States and its major trade partners. 10-year notes US10YT=RR last rose 2/32 in price to yield 2.9681 percent, from 2.975 percent late on Wednesday.

In the metals markets, copper hit a 4-1/2 year high, lifted by concerns over the potential for wage negotiations at the world's biggest copper mine to disrupt supply. CMCU3 rose 1.37 percent to $7,319.00 a tonne.

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