In This Article:
* China Q2 GDP matches consensus, monthly activity data upbeat
* Europe see-saws but MSCI world creeps to highest since Feb 2018
* MSCI ex-Japan reverse losses; Chinese, HK shares bounce off lows
* Aussie dollar climbs, Morgan Stanley says re-enters short USD/JPY trade
* Oil eases back, industrial metals nudge higher
By Marc Jones
LONDON, July 15 (Reuters) - Surprisingly upbeat economic soundings from China lifted the global markets mood on Monday, pushing world shares towards an 18-month high and steering the Aussie dollar and copper upwards.
Investors were waiting for a torrent of second-quarter corporate earnings this week and a G7 finance chiefs meeting in France, but there was plenty to be getting on with before that.
China's second quarter annual GDP growth rate fell to a 27-year low of 6.2% as expected, but its quarterly growth reading of 1.6% was ahead of forecasts and June reports on industrial production, retail sales and urban investment were also well above expectations.
Shanghai and Hong Kong stock markets had ended marginally positive, only held back by the concern that such a brisk pickup in activity may see economic policymakers ease back on the monetary and fiscal stimulus measures that were deemed largely responsible for the acceleration.
A report by Reuters that Washington may approve licenses for companies to restart new sales to Huawei in as little as two weeks also improved the mood in China’s tech sector, while a steady start in Europe left MSCI's world index eyeing Feb. 2018 highs.
"It is no surprise that China is slowing down and if you look at the other components of the data like retail sales and industrial production, they are looking a little bit better than expected," said CMC Markets analyst David Madden.
"Traders seem to be content to maintain a bit of optimism."
With the S&P 500 closing in record territory again on Wall Street on Friday and above 3,000 for the first time, markets are confident the U.S. Federal Reserve will cut its key interest rate by at least a quarter point late this month.
In currency markets, the Australian dollar, often played as a liquid proxy for the Chinese yuan, sprang to its highest since July 4 against the dollar as it ticked higher against the yen and the Swiss franc.
At 12.39%, the Vix volatility gauge had its lowest close since April. Ten-year Treasury yields continued to nudge higher, with the yield curve between 3 months and 10 years – whose inversion for much of the past two months was widely seen as a harbinger of recession over the next couple of years – back probing positive territory for the first since mid-May.