Global equity markets rose and the euro gained today amid investor optimism that European leaders over the next few days will come closer to resolving the euro zone's two-year-old debt crisis.
Brent crude oil rose more than $1 per barrel to above $110 after Paris and Berlin said a comprehensive euro zone debt deal was on its way.
"It seems like any negative surprise from this weekend's summit has been diminished by news European leaders will have a follow-up session on Wednesday," said Mike Cloherty, head of US rate strategy at RBC Capital Markets in New York. "Overall, I don't think anyone is looking for a complete solution that quickly."
Equity markets gained on the optimism and were also buoyed by strong earnings reports from US corporate icons.
McDonald's Corp reported higher-than-expected quarterly profit, Honeywell International Inc's quarterly earnings increased 45 per cent and the company lifted its full-year outlook, while General Electric Co posted an 18 per cent profit rise that met Wall Street's expectations.
MSCI's all-country world equity index gained 1.6 per cent and the FTSEurofirst 300 index of top European shares rose 1.9 per cent at 972.01 points. The Irish index of shares was .0.9 per cent higher at 2622.28.
Wall Street jumped more than 1 per cent shortly after the open.
The Dow Jones industrial average was up 142.52 points, or 1.23 per cent, at 11,684.30. The Standard and Poor's 500 Index was up 14.57 points, or 1.20 per cent, at 1,229.96. The Nasdaq Composite Index was up 26.25 points, or 1.01 per cent, at 2,624.87.
The euro gained 0.8 per cent to 1.3881 against the dollar, which fell to a record low against the yen after breaking through stop loss and options barriers. It was the dollar's biggest one-day decline in nearly two months.
One trader said Japanese banks then stepped in to buy dollars against the yen at 76.00 yen.
The benchmark December Brent crude contract rose $2.08 to $111.84 per barrel. US light crude oil futures were up $2.75 at $88.82.
Government debt prices on both sides of the Atlantic fell. German Bund futures extended losses to hit session lows while US benchmark 10-year notes fell.
Bund futures fell as much as 77 ticks on the day, while the benchmark 10-year US Treasury note was down 7/32 in price to yield 2.21 per cent.
Gold rose more than 1 per cent to a session high of $1,636.99 an ounce on the dollar's weakness.
Reuters
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