US economy hopes continue to buoy markets

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Pedestrians are reflected on the electric signboard of a securities firm in Tokyo, updating exchange rate of the U.S. dollar to Japanese yen, top, and that of the Euro to yen, bottom, Thursday, March 15, 2012. Japan’s Nikkei 225 index rose for a third straight day Thursday, basking in the ongoing retreat of the yen from record highs against the U.S. dollar. (AP Photo/Koji Sasahara)

(AP) European stocks eked out some more gains Thursday as optimism over the U.S. economy and a waning of concerns over Europe’s debt crisis continued to shore up markets.

In recent weeks, stocks have rallied hard on the combination of upbeat U.S. economic data and a more benign European debt backdrop. Many of the world’s major indexes are trading at multi-month highs. On Wall Street, the advances have been even greater, with markets trading at their highest level since the collapse of Lehman Brothers in 2008.

With the recent bout of fears of a Greek debt default over after the country concluded a bond swap with its private creditors to reduce its debt burden alongside the authorization of a euro130 billion bailout agreed, the focus will likely remain on the U.S. for the rest of the day.

Key economic releases include manufacturing surveys from the Philadelphia and New York branches of the U.S. Federal Reserve. Weekly jobless claims figures will also garner interest as investors weigh up whether the recent improvement in the U.S. jobs market is set to continue.

“The good news out of the U.S. with respect to economic data is expected to continue today,” said Michael Hewson, markets analyst at CMC Markets.

In Europe, Germany’s DAX was up 0.3 percent at 7,098 while the CAC-40 in France rose 0.2 percent to 3,570. The FTSE 100 index of leading British shares was flat at 5,944.

Wall Street was poised for a steady open, with both Dow futures and the broader S&P 500 futures up 0.2 percent.

In the currency markets, the euro recouped some recent losses, trading 0.3 percent higher at $1.3065. However, the dollar’s been buoyant since U.S. Federal Reserve chairman Ben Bernanke indicated that the central bank will not be coming forward with another monetary stimulus soon given the recent signs of an improving U.S. economy.

For much of the time since the financial crisis began around four years ago, the dollar has traded inversely to the performance of the U.S. economic data. When the U.S. economy was in deep recession, it often benefited from its perceived status as a safe-haven asset the opposite was true when the U.S. was seemingly on the mend.

“The dollar seems to be now moving in tandem with a growing U.S. economy as opposed to being a risk-off asset,” said Jordan Lambert, a trader at Spreadex.

It’s not just against the euro that the dollar has been benefiting. Against the yen, it’s near the 84 yen mark, way above the mid 70s yen it was trading at for much of last year.

Unsurprisingly Japanese stocks have garnered a lot of support in the wake of the yen’s retreat, with investors hoping it will help the country’s exporters. Japan’s Nikkei 225 index rose 0.7 a further percent to 10,123.28 its highest close since late July.

Elsewhere in Asia, Hong Kong’s Hang Seng closed 0.2 percent higher to 21,353.53.

But mainland Chinese shares fell, a day after Chinese Premier Wen Jiabao said curbs that have started to cool surging housing prices will remain in place despite complaints they might worsen an economic slowdown. Construction and real estate sales are key drivers of China’s growth. The benchmark Shanghai Composite Index lost 0.7 percent to 2,373.77 and the Shenzhen Composite Index shed 0.8 percent to 960.96.