- Strong auction of JGBs settles market nerves somewhat
- Treasuries and Bunds both steady
- Bitcoin rebounds after steep selloff
- Dollar could struggle as Fed prepares for rate cut
- Gold and broader precious metals complex skids
NEW YORK/LONDON, Dec 2 (Reuters) - Global shares rose on Tuesday and both cryptocurrencies and global government bonds stabilised after the previous day's selloff triggered by a looming interest rate hike in Japan.
Investors are also gearing up for an expected interest rate cut from the U.S. Federal Reserve.
Wall Street stocks were advancing after losing ground in the prior session. Technology and industrial shares were driving gains, while energy and consumer staples were leading losses.
The Dow Jones Industrial Average rose 0.16%, the S&P 500 rose 0.26% and the Nasdaq Composite rose 0.69%.
The broad stock indexes in Europe edged higher by 0.02% and Asia-ex Japan gained 0.45%.
"A simple way to think about this is from the lens of inflation, monetary policy and fundamentals," said Talley Leger, chief market strategist at The Wealth Consulting Group.
"On the inflation side, I'm not so concerned because it's below average back to early 1900s and I think that in turn gives the Fed scope to keep cutting rates - which is the market expectation being priced in now. You can add to that strong fundamentals in form of record holiday shopping and strong (corporate) earnings," Leger added.
Data on Monday supported expectations for a December rate cut by the Fed, with manufacturing contracting for a ninth straight month in November - though consumers did beat analyst expectations with a $23.6 billion online shopping spree to kick off the holiday season.
The MSCI World index of stocks across the globe rose 0.21%.
JAPAN BOND SELLOFF
More calm in the Japanese government bond market after a strong auction of Japanese government bonds helped the global mood. Japanese 10-year yields were down 0.27% and 30-year yields were lower by six basis points.
Bond yields move inversely to prices, and a weeks-long tumble in JGBs on concerns about the nation's finances and expected rate hikes from the Bank of Japan has sent 10-year yields to a 17-year peak and 30-year yields to an all-time high.
On Tuesday, global bonds again took their cue from JGBs, but this time echoed their calm - the U.S. 10-year Treasury yield was at 4.104% and the benchmark 10-year German yield was at 2.755%, both up marginally on the day.
BITCOIN DOWN 30% FROM OCTOBER PEAK
Bitcoin , which some see as a possible leading indicator for risk assets, inched higher on Tuesday after a 5.2% slump on Monday. At $87,000, it is down 30% from an October peak.
"Things are pretty stable currently, we're closing this year, with few - touching wood - negative surprises," said Samy Chaar, chief economist at Lombard Odier.
"Yesterday was mainly a non-event except for crypto assets. We've had a huge rout in bitcoin (over the past few weeks), and frankly the impact on global markets has been limited."
In currency markets the Japanese yen softened, with the dollar up 0.35% at 155.96 yen, and the euro up by a similar amount. ,
The dollar was also steady more broadly on Tuesday, after its softness on Monday helped hoist the euro briefly above $1.165. The common currency last traded at $1.16107.
Gold retreated 1% to $4,188.44 an ounce, but is still only around 4% from October's all-time peak. Silver shed 1%.
Oil prices fell slightly as traders weighed up risks from Ukrainian drone strikes on Russian energy sites and concerns about oversupply. Brent crude futures were down 0.08% to $63.12 a barrel. U.S. crude futures were lower by 0.08% at $59.27 a barrel.
Reporting by Chibuike Oguh in New York; Editing by Shri Navaratnam, Alex Richardson, Aidan Lewis and Deepa Babington
Source: Reuters