Japan up 4%, Europe up 2%, US futures up. Credit finally starting to ease (JP Morgan made a loan!), LIBOR expected to drop half a point. Oil up to $74 as panicked OPEC decides to cut production.
World stocks put in solid gains on Monday as investors took comfort in global efforts to prop up the banking system, allowing for some bargain hunting.
Gold also rose after recent losses, the dollar was broadly weaker and demand fell for government bonds.
Interbank lending rates — at the centre of fears about the industry freezing up — fell significantly, suggesting that government efforts to provide support were bearing fruit.
“There’s a perception that the credit squeeze could be beginning to abate thanks to measures from global authorities over the past couple of weeks,” said Philip Shaw, chief economist at Investec.
“Risk based assets seem to be in vogue this morning.”
European Central Bank President Jean-Claude Trichet added to the confidence-building over the weekend, pledging in a radio interview to do whatever it takes to restore confidence to financial markets.
He said the ECB was working very closely with the U.S. Federal Reserve to solve the financial crisis that has crippled equity markets for more than a year.
Also over the weekend, South Korea promised $130 billion in state guarantees and capital injections for banks, while the Dutch government said it would prop up financial group ING with around 10 billion euros ($13.52 billion). Continued…
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