Stock markets around the world reached five-year highs. In other words, they are back to where they were before the terrible recession. The difference between now and 2007 is that the world was in an economic expansion then. The same can hardly be said now, with Europe back in recession, along with Japan, probably, and the United States and China facing slowing expansion of their gross domestic products.

Reuters reports on the global market highs:

The Nikkei stock average  soared 3.7 percent and the MSCI global index, which tracks stocks in 45 countries, rose 0.3 percent, both the highest since June 2008.

European equities also nudged up as trading gathered momentum, bolstered by a crop of better than expected corporate earnings and with the German DAX index closing in on its own record high of 8,151,57 set back in 2007.

Monday’s comments from (ECB President Mario) Draghi that the ECB would cut rates again if needed, including pushing its key deposit rate into negative territory, kept downward pressure on the euro as it hovered little changed on the day at $1.3075.

The prospect of negative euro zone rates continued to underpin the bloc’s bond markets too with the benchmark German Bund a tick lower on the day at 146.15.

The main focus for Asian currency markets was the Reserve Bank of Australia’s policy meeting, at which the bank decided to lower its cash rate by 25 basis points to a record low 2.75 percent.

If the work by central banks does not produce substantial recovery signs, the markets will tumble as fast as they have risen.

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