World stocks have hit 21-month peaks and the dollar rose for the 11th straight day, after Federal Reserve Chair Janet Yellen flagged a possible interest rate rise next month during upbeat comments on the U.S. economy. Ivor Bennett reports.
We've heard of the Trump trade. Well, now there's another. (SOUNDBITE) (English) ROSS GERBER, CEO, GERBER KAWASAKI, SAYING: "It's kind of the Yellen trade, also relative to Trump in that you know, she's really setting out a path of rising rates over time in a measured way which is very good for the banking sector and also a positive sign for the economy." The Yellen trade sent world stocks to a 21-month high and the dollar on its longest winning streak in nearly 5 years. The comments by the US Federal Reserve Chair that a rate rise may come next month were more hawkish than many had expected. But hopes of a triple hike this year, others say, are misguided. (SOUNDBITE) (English) PETER DIXON, GLOBAL ECONOMIST, COMMERZBANK, SAYING: "I don't think we should go overboard. I think the Fed will prepare us for a rate hike but I still think that June is a more likely option than March." Banking stocks in particular are riding high Goldman Sachs up 37 percent since the US election. A better global outlook is also helping. With concerns over China's slowdown now largely priced in. (SOUNDBITE) (English) GLOBAL FINANCIAL ECONOMIST AT COMMERZBANK, PETER DIXON, SAYING: "Now seems like a good a time as any to ramp up markets a little bit, given all the potential pitfalls which could come our way if the geopolitical situation were to deteriorate." There's still plenty of uncertainty ahead. Not least what the protectionist policies of Donald Trump will ultimately mean for trade and global growth. Markets keen to stay ahead of the curve.