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World stocks at record high after month-long surge

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Bond markets buoyed by U.S. rate cut hopes

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Chinese markets lifted by property sector speculation

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Yen enjoys respite from dollar strength

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Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Marc Jones

LONDON, May 16 (Reuters) - World stocks hit a record

high and bond markets rallied on Thursday as galvanized hopes of

interest rates cuts in the United States and other major

economies extended a powerful month-long global bull run.

Investors were still basking in the glow of Wednesday's mild

U.S. inflation data as well as growing optimism in Asia that

China was finally looking at the kind of measures that might

ease its property crisis.

MSCI's benchmark world stocks index, which

tracks 47 countries, was up for a sixth straight day and the

STOXX 600 was trying to take Europe's winning streak to

10 days, which would be the longest since August 2021.

Japan's yen was enjoying respite from the dollar while

benchmark government bond yields - which

drive the global cost of borrowing - hit one-month lows on bets

the U.S. might now cut its interest rates twice this year.

"The prospect of the (U.S) inflation pressures easing was

enough for the market to be quite enthusiastic, let's put it

that way," Rabobank's Head of Macro Strategy Elwin de Groot

said.

"Also, up until not too long ago, the market was focused on

the U.S. outperforming Europe on many fronts. But now that has

almost started to reverse," he added, pointing to another

monthly improvement in euro zone industrial production data.

Overnight in Asia, Chinese and Hong Kong property shares had

rallied after reports that Beijing was considering a plan for

local governments to buy up millions of unsold homes across the

country.

The CSI 300 real estate index and mainland

property developers traded in Hong Kong jumped 3.5% and

4.9%, respectively, while the yuan rose as the U.S.

dollar sagged globally in the wake of the U.S. inflation data.

The dollar was at fresh multi-week lows against the euro and

sterling in Europe. U.S. Treasury yields also extended

their retreat, sinking to six-week troughs. That in turn helped

the yen continue its recovery despite data showing the Japanese

economy contracting more than expected.

The dollar slipped to 154.62 yen in Europe from as

high as 156.55 in the previous session.

In the main commodity markets, gold inched towards record

levels and crude oil added to gains after rebounding strongly

overnight from a two-month trough. Wider volatility gauges like

the VIX have also been sunk by the recent market surges.

"The expression of relief ripples through risky assets, with

markets coming alive the moment we saw U.S. core CPI," Chris

Weston, head of research at Pepperstone, wrote in a report.

"All in all, after three months of troubling price

pressures, this is a report that will sit well with (Fed Chair)

Jay Powell and Co."

Brent futures rose 39 cents, or 0.47%, to $83.14 a

barrel, while U.S. West Texas Intermediate crude (WTI)

gained 42 cents, or 0.53%, to $79.05, adding to Wednesday's

strong gains.

(Additional Reporting by Kevin Buckland in Tokyo; Editing by

Hugh Lawson)