© Reuters. FILE PHOTO: A man wearing a protective face mask walks past a screen with a chart showing the recent average Nikkei share outside a broker, amid coronavirus disease (COVID-19), in Tokyo
By Hideyuki Sano
TOKYO (Reuters) – Global equities climbed on Monday after US President Donald Trump signed a $ 2.3 billion pandemic aid and spending package, refraining from his earlier threat to block the two parties’ bill.
Markets applauded the move because it would restore unemployment benefits for millions of Americans and prevent a federal government strike in the world’s largest economy.
“As the coronavirus pandemic shows little sign of decline, first aid was needed to prevent a sharp slowdown in the economy during the first quarter,” said Nobuhiko Kuramochi, Mizuho Securities market strategist. “It would have been disturbing if we had not had it by the end of the year.”
The US rose 0.62% with its first trade after Christmas break, with a higher record than last week.
The futures earlier reversed the losses after a cryptic tweet by Trump – “Good news about Covid Relief Bill. Information to follow” – helps offset concerns about further delays in stimulus spending.
European equities are expected to follow, with 0.42%, although many markets, including London, will be closed on Monday.
0.74% increased. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.20%, but trading is slow with many markets still closed.
“It is positive for markets that we no longer have a chaos over stimulus as there is a chance of a partial strike by the government,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui (NYSE :), DS Asset Management , said.
“But on the other hand, markets have been talking about the stimulus for a long time, and I would say most of it has already been priced in.”
U.S. yields declined, and the U.S. Treasury for ten years rose 1.5 basis points to 0.945%.
The deployment of COVID-19 vaccines also strengthens hopes for more economic normalization next year, with Europe launching a mass vaccination process on Sunday.
It first sounded the alarm over a new, highly contagious variant of the virus that raged in the south-east of England and was confirmed over the weekend in many other countries, including Japan, France and Canada.
CURRENCY AND COMMODITIES
Major currencies have changed little.
The dollar is widely expected to remain under pressure against other riskier currencies, as investors are betting on continued recovery in the world economy and a long period of U.S. monetary policy.
The euro traded at $ 1.2221, slightly less than its 2-1 / 2-year high of $ 1.22735, while the yen changed owner at 103.42 per dollar.
The British pound changed hands from $ 1.3571, not far from a 2-1 / 2-year high of $ 1.3625 that was hit earlier this month after Britain and the European Union reached an agreement on the trade framework after Brexit.
Precious metals were more vibrant as gold jumped more than 1% to $ 1,899.7 per ounce and silver increased about 3% to $ 26.62 per ounce. [GOL/]
“The US stimulus package will boost the economy and lead to risky trading and a weaker dollar that should support gold,” said Tatsufumi Okoshi, a senior trading strategist at Nomura Securities.
also raised profits to a new high of $ 28,377.94 over the weekend before dropping to $ 27,068, bringing the total value of the crypto-currency to more than $ 500 billion.
Oil prices declined slightly, with futures contracted 0.3% lower at $ 48.09 a barrel. [O/R]