U.S. shares rally while oil climbs, dollar dips

New York, Sept 12 (Reuters) – Wall Street indexes followed European shares higher on Monday even as oil prices climbed on supply concerns after investors were encouraged by news that Ukrainian forces had advanced against Russia in a war that has hurt the global economy.

The U.S. dollar fell to its lowest level in about two weeks against a basket of currencies after recent strong gains a day ahead of closely watched consumer price data as central banks outside of the United States appeared increasingly hawkish. read more

U.S. Treasury yields eased as bond investors also awaited consumer price data although they were not expecting it to alter the Federal Reserve’s plans for an aggressive interest rate hike as it tries to tame soaring inflation.

On Saturday, Moscow abandoned its main bastion in northeastern Ukraine, in a sudden collapse of one of the war’s principal frontlines after Ukrainian forces made a rapid advance. read more

“Market’s rallied overnight in a follow through from Friday. You have stories about Ukraine making progress. Ultimately a move beyond the war is a positive for everybody. Obviously, it still remains to be seen but it’s helping fuel the optimism,” said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

The Dow Jones Industrial Average (.DJI) rose 256.2 points, or 0.8%, to 32,407.91, the S&P 500 (.SPX) gained 36.18 points, or 0.89%, to 4,103.54 and the Nasdaq Composite (.IXIC) added 100.08 points, or 0.83%, to 12,212.39. read more

The pan-European STOXX 600 index (.STOXX) rose 1.52% and MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 1.15%.

Earlier MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed 0.9% higher, having bounced from a two-year low hit last week.

In currencies, the euro reacted positively to Ukraine’s advances, extending gains that started last week after a European Central Bank (ECB) rate hike announcement. Also Reuters reported that ECB policymakers see a growing risk they will have to raise their key interest rate to 2% or more to curb inflation despite a likely recession. read more

The dollar index fell 0.57%, with the euro up 0.94% to $1.0133.

The Japanese yen strengthened 0.11% versus the greenback at 142.36 per dollar, while Sterling was last trading at $1.1704, up 1.01% on the day.

Sterling briefly fell to its lowest level since early 2021 against a robust euro on Monday, while news that Britain’s economy grew less than expected in July highlighted a weak growth outlook. read more

Benchmark 10-year notes last rose 10/32 in price to yield 3.2831%, from 3.321% late on Friday. The 30-year bond last rose 11/32 in price to yield 3.4376%, from 3.456%. The 2-year note last rose 3/32 in price to yield 3.5277%, from 3.571%.

Consumer price data on Tuesday is expected to show headline inflation to have risen 8.1% year-over-year in August, compared with 8.5% in the prior month.

Core CPI, which strips out volatile food and energy prices, is expected to have increased to 6.1% from 5.9% in July.

“I don’t think that number is going to change anything tomorrow vis-a-vis what the Fed does, unless you had such an extreme number,” said David Petrosinelli, senior trader at InspereX. “You’ve heard the Fed the last week and a half just pound 75 basis points home,” he said. read more

Oil prices rose on Monday as Iranian nuclear talks appeared to hit obstacles and an embargo on Russian oil shipments loomed, with tight supply struggling to meet still robust demand.

U.S. crude recently rose 1.61% to $88.19 per barrel and Brent was at $94.32, up 1.59% on the day.

Spot gold added 0.8% to $1,728.90 an ounce as it was bolstered by a weaker dollar. U.S. gold futures gained 0.67% to $1,727.70 an ounce.

Additional reporting by Herbert Lash in New York,Samuel Indyk in London, Wayne Cole in Sydney; Editing by Bernadette Baum and David Evans

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