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Global stocks rally ahead of Fed and Bank of Japan meetings

Global stock markets started the new trading week strongly Monday as investors appeared to put last week’s jitters behind them as they awaited the outcome of the latest policy meetings of the U.S. Federal Reserve and Bank of Japan later this week.

KEEPING SCORE: In Europe, Britain’s FTSE 100 index of leading British shares was up 1.5 percent at 6,807 while the CAC-40 in France rose 1.5 percent to 4,397. Germany’s DAX was 0.8 percent higher at 10,359. U.S. stocks were poised for a solid opening too, with Dow futures and the broader S&P 500 futures up 0.4 percent.

CENTRAL BANK FOCUS: Much of the attention in markets this week will center on Wednesday’s monetary policy meetings in the U.S. and Japan. While the Fed is expected to keep interest rates unchanged, it could well hint that another rate hike is more than likely by the end of the year. Meanwhile, the Bank of Japan is expected to unveil some further measures to boost the ailing Japanese economy. Possible action could involve an increase in its stimulus program or a further cut into negative territory in the deposit rate aimed at encouraging banks to lend rather than hoard bank at the central bank.

ANALYST TAKE: Mike van Dulken, head of research at Accendo Markets, said the strong Monday gains being posted suggest “a welcome receding of last week’s investor uncertainty regarding global central bank policy, more confidence that Wednesday will see the BoJ maintain its stimulus course and the Fed eschew another hike.”

ASIA’S DAY: South Korea’s Kospi added 0.8 percent to 2,015.78 and Hong Kong’s Hang Seng index rose 0.9 percent to 23,550.45. China’s Shanghai Composite Index added 0.8 percent to 3,026.05. Japan was closed for a holiday.

AUSTRALIA GLITCH: Australia’s stock market suspended trading after a couple of hours due to technical glitches. Australia’s S&P/ASX 200 finished at 5,294.80, little changed from the previous session.

OIL: Benchmark U.S. crude added 64 cents to $43.67 per barrel in New York. Brent crude, used to price international oils, rose 64 cents to $46.41 per barrel.

CURRENCIES: The euro was flat at $1.1161 while the dollar fell 0.4 percent to 101.84 yen.

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