HONG KONG, July 13 — Wherever you look in global financial markets, signs are emerging that the fallout from Britain’s vote to leave the European Union is under control.

Global stocks are rising for a fifth day, having recovered almost US$4 trillion (RM15.9 trillion) in value lost in the days following the UK’s June 23 referendum, and emerging-market valuations are near their highest in more than a year. Copper is rising, boosted by signs policy makers are prepared to act to limit the fallout, while acquisitions have resumed and corporate bond sales are showing signs of picking up. The yen and government bonds, while climbing today, have given back much of the gains they made since the Brexit vote.

Calm is returning to global markets on speculation central bank action will be sufficient to restrict any Brexit contagion. Economists predict the Bank of England will cut interest rates tomorrow, while Japanese Prime Minister Shinzo Abe has ordered more fiscal stimulus. Traders are pricing in less than 35 per cent odds of the Federal Reserve raising rates this year, even though Fed Bank of St. Louis President James Bullard says he expects near-zero impact on the US. The mark on the UK is more enduring, with sterling about 11 per cent weaker versus the dollar since the vote.

36 South Capital Advisors, a London-based volatility hedge fund, was surprised at how rapidly markets settled, according to Chief Investment Officer Richard Haworth.

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“This is the strangest environment I’ve seen in 30 years,” Haworth said. “I had a sneaking suspicion that Brexit could have been the butterfly’s wing that created a hurricane down the line. But maybe, maybe not.”

The MSCI All-Country World Index rose 0.2 per cent at 10:38am London time, leaving them 0.4 per cent stronger than the close on the day before the results of Britain’s referendum were released. Bank of America Merrill Lynch’s GFSI Market Risk Index, a measure of future price swings implied by option markets in global equities, rates, currencies and commodities, has fallen to the lowest since June 7.

Stocks

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The Stoxx Europe 600 Index added 0.3 per cent, rising for a fifth day in the longest winning streak since the Brexit vote. The gauge is within 10 points of erasing its losses after the June 23 referendum.

An index of European commodity companies headed for the highest level since August as a rally in copper helped Glencore Plc and BHP Billiton Plc rise at least 1.9 per cent each. Nokia Oyj advanced to the highest level since April after expanding its patent cross-licensing agreement with Samsung Electronics Co. Accor SA rose after announcing plans to separate its HotelInvest unit and eventually sell a majority stake in the subsidiary.

Playtech Plc climbed after saying it bought Vienna-based Best Gaming Technology GmbH for €138 million (RM607.4 million). Steinhoff International Holdings NV agreed to buy UK discount chain Poundland Group Plc for £597 million (RM3.1 billion) a day after AMC Entertainment Holdings Inc. moved for Odeon & UCI Cinemas Group in a £921 million deal.

Bank Pekao SA, Poland’s second-biggest bank, dropped 4.5 per cent, set for the biggest decline in more than a year, after Italy’s UniCredit SpA said it was selling as much as 10 per cent of the company to raise capital.

Futures on the S&P 500 Index were little changed, after the benchmark ended the last session at a record high. The CBOE Volatility Index, the measure of future volatility in US stocks, has almost halved since June 24, when the shock Brexit vote caused the wildest swings since August 2011. A similar gauge of European stock volatility fell yesterday to the lowest level since May.

The MSCI Emerging Markets Index climbed 0.2 per cent. Hong Kong’s Hang Seng China Enterprises Index advanced 0.6 per cent, its third day of gains. China’s exports and imports slipped in dollar terms in June as soft demand continued to weigh on trade. In yuan terms, outbound shipments posted a small gain, reflecting the influence of a weakening currency.

Currencies

The yen strengthened 0.1 per cent to 104.55 per dollar, after sliding more than 4 per cent over the last two days. Abe has ordered his economy minister to compile stimulus measures this month, while the Sankei newspaper reported government officials are considering “helicopter money” as a policy option. Chief Cabinet Secretary Yoshihide Suga said such a policy, which involves the central bank directly financing government spending, was not being looked at.

The pound rose 0.2 per cent to US$1.3270, headed for its longest winning streak in two months, before Theresa May takes over as prime minister later today, ending a period of political instability that has lasted since the EU vote. The result of the referendum pushed sterling to its worst day on record and sent the pound to the lowest level since 1985 last week, before it recovered some of that ground as it became clear a new leader would take power earlier than previously thought.

The yuan was little changed at 6.6959 per dollar in offshore trading amid speculation China’s central bank is limiting the supply of the currency in Hong Kong to deter bets on depreciation, as it did in January to halt the yuan’s slide to a five-year low. The currency’s overnight interbank rate in Hong Kong more than doubled to 4.83 per cent, the highest since February.

“It feels like the People’s Bank of China is quite serious about defending the 6.7 level,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. in Singapore. “This reminds me of what happened in January.”

Malaysian ringgit forwards briefly extended losses after the central bank cut interest rates, surprising all but one economist in a Bloomberg survey. One-month non-deliverable contracts slid as much as 1 per cent to 4.0058 per dollar before paring the decline to 3.9850. The yield on three-year notes fell three basis points to 3.01 per cent.

Commodities

Crude oil fell 1.3 per cent to US$46.20 a barrel, after jumping 4.6 per cent yesterday, when US industry data was said to show the nation’s stockpiles increased by 2.2 million barrels last week. Government figures today are forecast to show supplies slid.

Copper climbed 1.5 per cent in London, building on a 3.9 per cent advance over the last three trading days, on speculation central-bank stimulus measures will buoy demand for materials. Iron ore rose to the highest level since April on the Dalian Commodity Exchange as steel rebar traded near a 10-week high in Shanghai. Nickel fell 1.7 per cent, retreating from an eight-month high.

Cotton jumped as much as 5 per cent to a two-year high in China after the US Department of Agriculture cut its projections for world output and stockpiles by more than analysts forecast.

Bonds

Treasuries rose, sending the yield on notes due in a decade two basis points lower to 1.49 per cent. The rate, which sank to an unprecedented 1.32 per cent a week ago, surged 15 basis points over the past two sessions as demand at auctions of three- and 10-year weakened to levels last seen in 2009.

Germany’s securities also halted a two-day decline, even as the nation auctioned 10-year debt with a negative yield for the first time. Yields are negative on around 38 per cent of the US$25.3 trillion of securities that comprise the Bloomberg Global Developed Sovereign Bond Index.

Deutsche Bahn AG this week became the first non-financial company to sell negative-yielding bonds in euros. The German state-owned railroad sold €350 million of five-year debt to yield minus 0.006 per cent yesterday, according to data compiled by Bloomberg.

Investors who rushed into bonds last week will face a hard time making money as rates begin to rebound, according to Jeffrey Gundlach, chief executive officer of DoubleLine Capital.

“There’s something of a mass psychosis going on related to the so-called starvation for yield,” Gundlach, whose firm manages US$102 billion, said during a webcast yesterday. “Call me old-fashioned, but I don’t like investments where if you’re right you don’t make any money.” — Bloomberg