SYDNEY (Reuters) – Asian stock markets resumed their rise on Monday as investors pinned their hopes on vaccines to eventually deliver a global economic boost, even as a possible tightening of the virus rules for Tokyo outperformed 30-year-old Japanese stocks highlight highlighted.
After a slow start, MSCI’s broadest Asia-Pacific equities index outside Japan swung 0.8% higher to reach an all-time high again.
South Korea climbed to a record 2%, led by the chip and automotive sector, while Chinese blue chips added 0.3%.
E-Mini futures for the S&P 500 were steady after reaching a record high as well. EUROSTOXX 50 futures were flat, while FTSE futures were up 0.4%.
Investors are still counting on central banks to keep money cheap, while coronavirus vaccines are helping to revive the world economy over time, although much of the optimism has already been praised and the virus is still spreading.
The Japanese Nikkei dropped early gains by 0.4% after Prime Minister Yoshihide Suga confirmed that the government was considering a state of emergency for Tokyo and three surrounding prefectures.
Investors on Tuesday are closely watching the run-off elections in Georgia for two U.S. Senate seats that will determine which party controls the Senate.
If Republicans win one or both, they will retain a slim majority in the House and could block President-elect Joe Biden’s legislative goals and judicial nominees.
“If Democrats win both races, Vice President-elect Kamala Harris will be the deciding vote, giving the party uniform control over the White House and Congress,” CBA analysts said.
“This will increase the likelihood that a substantial U.S. spending package for infrastructure will be quickly followed by Congress.”
Minutes of the Federal Reserve meeting in December, which is due to take place on Wednesday, should provide more details on discussions on the expression of their future policy guidelines and the chances of a further increase in asset purchases this year.
PAYMENTS A RISK
The data calendar contains a series of manufacturing surveys around the world, which will show how the industry handles the spread of the coronavirus, and the accurate ISM surveys of US factories and services.
Chinese manufacturing activity continued to accelerate in December, although the PMI missed forecasts at 53.0.
Japan’s manufacturing activity stabilized in December for the first time in two years, while Taiwan picked up.
On Friday, the US payroll report will be presented in December, where the median forecasts are only a modest increase of 100,000.
Analysts like Barclays are giving a 50,000 job drop, which will be a shock to hope for a speedy recovery.
“A number of incoming indicators of activity point to a slower momentum as the economy closes the year, including labor market data where initial demands rose during the survey period in December,” economist Michael Gapen said in a note.
Such a drop would put pressure on the Fed to ease further, which is another burden for the dollar, which is already suffering from the weight of the massive US budget and trade deficits.
The dollar index was last at 89,704, not far from the recent 2-1 / 2-year low of 89,515 which plunged nearly 7% in 2020.
The euro fell back to $ 1.2252, after becoming profitable last week when it reached its highest level since early 2018 at $ 1.2309. It has reached almost 9% by 2020.
The dollar slipped to 103.02 yen and saw the danger of testing key support at 102.55. Sterling was confirmed to $ 1.3690, levels last seen mid-2018.
In the cryptocurrency space, Bitcoin rose to $ 33,102, after hitting a historic high of $ 34,800.
The fall in the dollar supported gold, leaving the metal 1% firmer at $ 1,917 per ounce.
Oil prices rose after several months of solid gains, with Brent resisting $ 52.50 a barrel. The rebound continued to lower Brent by 21.5% for the year, and WTI by 20.5%. [O/R]
Brent crude futures rose 36 cents to $ 52.16 on Monday, while U.S. crude added 32 cents to $ 48.84 a barrel.
Edited by Jane Wardell and Kenneth Maxwell