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Friday 20:00 GMT. US stocks secured a fifth successive week of gains, with the benchmark S&P 500 index in positive territory for the year, as participants continued to put the extreme turbulence seen in the early part of 2016 behind them.

At the close of New York trade, the S&P was up 0.4 per cent on the day at 2,049, giving it a five-day gain of 1.3 per cent. The equity index ended 2015 at 2,043.94.

The CBOE Vix “fear gauge” was below 14 in late trade — way beneath its long-term average of about 20 — and heading for its lowest finish since August.

There was a less bullish tone across the Atlantic, however, as the Euro Stoxx index edged up 0.3 per cent, but ended marginally lower on the week. In Tokyo, the Nikkei 225 fell 1.3 per cent on Friday and was down by the same amount for the five-day period.

Wall Street’s hefty rally over the past five weeks — the S&P has gained more than 13 per cent over the period — has coincided with a strong rebound for oil prices, and, more recently, steep falls for the dollar and US Treasury yields.

Underpinning those moves has been a tendency towards “dovishness” from the world’s major central banks, culminating in the Federal Reserve on Wednesday scaling back its expectations for how much US interest rates will rise this year to bring them more in line with the views in the market.

“The world’s major economies have held central bank meetings during March and across the central banks there has been a convergence in sending a common message that it is appropriate to keep policy rates ‘lower for longer’,” said Pernille Bomholdt Henneberg, senior analyst at Danske Bank.

“The Fed was surprisingly dovish, which also reduced systemic risks, as the stance has supported emerging market assets as well as commodity prices, which were also under severe stress at the beginning of February.”

Earlier in the week, the Bank of Japan left its policy stance unchanged but delivered a downbeat assessment of the outlook for the country’s economy, fuelling expectations that it might soon unveil further stimulus measures.

The Bank of England and Swiss National Bank also stood pat this week, although Norway’s central bank cut interest rates to a record low and refused to rule out the possibility of negative rates in the future.

The latest batch of policy meetings came just days after the European Central Bank unleashed a bold and comprehensive package of measures to bolster growth and inflation.

But the clear focus this week was the Fed, as it triggered steep falls for the dollar and Treasury yields by cutting its median “dot-plot” prediction to two 25 basis point rate rises in 2016 from the four pencilled in last December.

The dollar index, a measure of the currency against a weighted basket of peers, sank to a five-month low — before rallying moderately on Friday — and drove dollar/yen to the lowest since November 2014. The euro hit a five-week high above $1.13 before easing back on Friday.

Emerging market currencies also performed well against the dollar following the conclusion of the Fed meeting.

“This week’s shockingly dovish Federal Open Market Committee meeting was the latest insult to already vastly reduced dollar longs and sets up the argument for a weaker dollar from here,” said John Hardy at Saxo Bank.

“It appears that the Fed would prefer to let the US economy run too hot. But we may also continue to see that this market is highly unsure of itself and the move lower in the dollar suddenly fades.”

There were similarly sharp moves for shorter-term US Treasuries. The two-year yield briefly nosed above 1 per cent just before the Fed’s statement was released, but was trading at 0.84 per cent on Friday — down 3bp on the day, and 13bp lower than a week ago.

The 10-year US yield was down 3bp on Friday at 1.87 per cent, for a five-day drop of 11bp, while its German equivalent ended the week at 0.21 per cent, down 2bp on the day and 7bp on the week.

The rapid decline for the dollar and Treasury yields was of only limited help to the gold price, however. The metal leapt $30 an ounce immediately after the Fed news but on Friday was down $3 at $1,254, up $6 on the week.

Oil remained a key driver of market sentiment as hopes for an output freeze by major producers drove prices higher for much of the week.

US West Texas Intermediate hit a three-month peak above the $40 a barrel milestone on Thursday but by Friday was back down to $39.38, down 2 per cent on the day but still up 2.3 per cent on the week.

Brent settled at $41.20, down 0.8 per cent on the day but again, up 2 per cent on the week — and up more than 50 per cent from a 12-year low hit in January.

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