World equities stood near record highs on Friday after strong US and Chinese economic data confirmed expectations of a solid global recovery from the coronavirus-induced slump.
European equities are expected to be inches higher, with Euro Stoxx futures up 0.1% and Britain’s FTSE futures market slightly higher.
MSCI’s broadest index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) last rose 0.25%, with Shanghai (.SSEC) equities adding 0.6%. The Japanese Nikkei (.N225) rose 0.1%.
MSCI’s broadest benchmark for world equities (.MIWD00000PUS) rose 0.05% through late Asian trading, staying just below Thursday’s record high.
“Markets are looking forward to economic normalization as vaccines will circulate. Share prices are likely to rise gradually as future earnings are looked at,” said Tomo Kinoshita, global market strategist at Invesco Asset Management in Tokyo.
The markets in Asia were largely stable after China reported a record growth of 18.3% in the first quarter. read more
The data has changed little to the view that rapid expansion is expected to moderate later this year as the government draws its attention to overheating financial risks in parts of the economy.
“Regulators may make further efforts to cool the real estate market and control local leverage. Fiscal discipline may also be strengthened, which could lead to a slowdown in local government funding and infrastructure investment,” said Chaoping Zhu, global market strategist at JP Morgan Asset Management. in Shanghai, said.
Data from the US was raised overnight, with retail sales falling 9.8% in March, pushing the sales level 17.1% above the pre-pandemic level to a record high. read more
The brightening economic outlook has been underlined by other data, including first-time claims for unemployment benefits that dropped to their lowest level since March 2020 last week.
“The U.S. recovery looks really strong. And now that restaurants and hotels, both of which are labor-intensive, are reopening, we can see sharp gains in the payroll next month,” said Koichi Fujishiro, senior economist at Dai-ichi Life Research. .
Despite strong data, US bond yields have fallen, driven in part by Japanese purchases, as it began a new financial year this month.
The US Treasury’s 10-year yield fell to 1.529% on Thursday, a five-week low, last rising to 1.578%, below the 14-month high of 1.776% set at the end of March.
“The market has praised an economic recovery in the US in the short term. And if the Federal Reserve keeps interest rates for the next two to three years, the execution of US bonds will undoubtedly be very attractive compared to Japanese countries. the eurozone, ”said Chotaro Morita, chief strategist for fixed income at SMBC Nikko Securities.
The decline in long-term returns has favored stocks, and especially technology stocks, given the idea that their historically expensive valuations can be justified because investors have no choice but to buy stocks to make up for low-yield bonds.
On Wall Street, the S&P 500 (.SPX) rose 1.11%, while the tech-savvy Nasdaq Composite (.IXIC) added 1.31%, approaching its February high.
In the foreign exchange market, the US dollar was lower yields.
The euro stood at $ 1,1951 after hitting a six-week high of $ 1.19935 overnight, while the US currency fell to a three-week low of 108.61 yen and last traded at 108.89.
Gold also reached a seven-week high of $ 1,769 per ounce and last stood at $ 1,765.50.
Oil prices peaked at one month due to higher demand forecasts from the International Energy Agency (IEA) and OPEC, in addition to positive US and Chinese data.
Brent futures rose 0.6% at $ 67.37 a barrel, while U.S. crude rose 0.55% to 63.81 a barrel, both on track for their first material weekly gain in six.
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