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GLOBAL MARKETS-Euro extends rally on ECB comments; oil settles higher

Published 2018-06-07, 03:58 p/m
© Reuters.  GLOBAL MARKETS-Euro extends rally on ECB comments; oil settles higher
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* Euro jumps as investors bet on ECB stimulus wind-down

* U.S. Treasury prices extend gains

* U.S. stocks mixed

By Caroline Valetkevitch

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

U.S. Treasury prices extended gains as worries about global trade and losses in emerging markets sparked a fresh wave of safe-haven demand for U.S. government debt. 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 ECB President Mario Draghi, said on Wednesday. Other ECB officials echoed Praet's sentiment. comments drove the euro as high as $1.1840 EUR= , the highest level since May 17. The European single 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 last up 0.22 percent to $1.1799. The dollar index .DXY , which tracks the greenback against a basket of major currencies, fell 0.24 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 crisis-plagued Venezuela, which faces the threat of U.S. sanctions. crude CLcv1 rose $1.22 to settle at $65.95 a barrel, while Brent LCOcv1 gained $1.96 to settle at $77.32.

The higher prices helped energy shares on Wall Street, with the S&P 500 energy index .SPNY last up 1.7 percent, making it 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 4.4 percent jump in McDonald's (NYSE:MCD) shares MCD.N following news of potential layoffs boosted the Dow.

The Dow Jones Industrial Average .DJI rose 87.19 points, or 0.35 percent, to 25,233.58, the S&P 500 .SPX lost 2.83 points, or 0.10 percent, to 2,769.52, and the Nasdaq Composite .IXIC dropped 54.46 points, or 0.71 percent, to 7,634.78.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.19 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.03 percent.

Emerging market stocks lost 0.30 percent.

Investors were focused on the 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 after Trump imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union last week.

The summit takes place on Friday and Saturday in Charlevoix, Quebec.

The global trade worries boosted Treasury prices.

Benchmark 10-year notes US10YT=RR last rose 15/32 in price to yield 2.9204 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 that wage negotiations at the world's biggest copper mine could disrupt supply. CMCU3 rose 0.37 percent to $7,247.00 a tonne.

*****For Reuters Live Markets blog on European and UK stock markets, type code LIVE/ into a news window*****

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Euro and Bund yields June 7

https://reut.rs/2JrJPXC S&P 500 Volatility

https://reut.rs/2M7b77t World FX rates in 2018

http://tmsnrt.rs/2egbfVh

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