LONDON / HONG KONG (Reuters) Global equities rose on Tuesday as robust China trade data boosted confidence for a rebound in its domestic demand, and market players awaiting US data are expected to show an increase in inflation .
China’s exports in dollar terms rose more than 30% in March from a year earlier, while imports rose 38%, the fastest pace in four years, indicating that local spending has recovered from the pandemic.
The broad Euro STOXX 600 rose 0.3% to near record highs, with export-heavy German equities up 0.2%. Indices in Paris and London fell by 0.1%.
Investors were focused on US inflation data for March, at 1230 GMT. Markets expect a predicted increase in inflation to accelerate the recent movements by equity investors to turn to cyclical equities.
“The question for the next few months is not whether inflation will increase, but how far inflation will increase,” said Hugh Gimber, world market strategist at JP Morgan Asset Management.
“We do see room for further increases in treasury yields during the course of 2021. We would expect this to be a continuation of the rotation we have seen over the past six months or so to more cyclical sectors.”
The yield on the U.S. Treasury for ten years rose to 1.6908%, which was lower than a 14-month high of 1,776% reached on March 30th.
The MSCI World Equities Index, which tracks equities in 49 countries, was lower.
Wall Street futures were flat.
Earlier, Asian equities gained support with strong China trading data, although MSCI’s widest index of Asia-Pacific equities outside Japan dropped its gains – as did China’s blue-chip index, CSI300.
“China is benefiting from a rising ‘first, first out’ recovery, but the world economy is accelerating and growing and this will reduce some of China’s export performance in the coming quarters,” said John Woods, Credit Suisse’s chief investment officer in Asia-Pacific, said. official.
“MEANING OF HERBOND”
In foreign exchange markets, the dollar rose from a three-week low to other major currencies on Tuesday, driven by a rising yield in the treasury.
The dollar fell back this month, along with US yields, after rising to a higher lunar point as markets expect major fiscal stimulus, coupled with continued monetary easing, to spur US economic growth and higher inflation.
Eric Rosengren, president of the Boston Federal Reserve, said Monday that the U.S. economy could see a significant upswing this year due to weakened money and fiscal policy, but the labor market in the country is still weak.
He said that inflation was still below the central bank’s target rate of 2%, that the current ‘very accommodating’ stance in monetary policy remained appropriate.
The futures contract for Brent crude rose 37 cents, or 0.5%, to $ 63.63 a barrel at 0744 GMT. U.S. crude oil futures rose 27 cents, or 0.5 percent, to $ 59.58 a barrel.
Reporting by Tom Wilson in London and Scott Murdoch in Hong Kong; Edited by Stephen Coates, Simon Cameron-Moore, Larry King