© Reuters. 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 stock prices rose as US bond yields hovered near a 13-month high on Monday, with investors betting that US economic growth will accelerate after President Joe Biden last week raised a $ 1 stimulus bill , 9 billion.
A deployment of COVID-19 vaccinations in the United States and some other countries has sparked a strong mood on risky assets, even as investors become wary of key central banking policies meeting later in the week, including the US Federal Reserve .
“The US has now vaccinated more than three million people a day, and President Biden now says that all adults can get a chance by May 1. It could soon achieve herd immunity and economic normalization,” Norihiro Fujito said. , main investment, said. strategist at Mitsubishi UFJ (NYSE 🙂 Morgan Stanley (NYSE 🙂 Securities.
U.S. futures rose 0.2% in early Asian trade, trading just below a record high last week, up 0.3%.
Chinese share in the mainland tends to trade lower, despite data suggesting an increase in industrial production and an increase in retail sales.
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.2%, with Hong Kong making the suburbs.
“Most market participants and policymakers are amazed at the rapid recovery. According to our estimate, the US economy will reach pre-COVID-19 production levels by the current quarter,” said Chetan Ahya, world economics chief.
“Fiscal policy does much more than fill the gap. Transfers to households have already exceeded the revenue lost in the recession. As the reopening accelerates, the labor market is poised for a sharp setback.”
The U.S. House of Representatives finally approved the approval of the COVID-19 Bill last week, giving Biden his first major victory in office.
Some investors speculate that a portion of $ 1400 direct payments to households may find their way to stock markets, as is evident with similar direct payments made for coronavirus relief last year.
Investors also suspect that the $ 1.9 billion package, which accounts for more than 8% of the country’s GDP, could cause inflation – to the detriment of bonds, especially if their returns are so low.
Rising inflation expectations could signal the Federal Reserve that it will start raising rates sooner when it announces its latest economic projections at the end of the Federal Open Market Committee (FOMC) meeting on Wednesday.
“Following the fiscal stimulus packages, this is inevitable
“The Fed’s GDP forecasts will be revised, and some FOMC members may think that rates will have to move faster than they expected in December,” write ANZ economists.
The U.S. Treasury yield for ten years was 1,628%, rising to 1,642% on Friday, a peak last seen in February last year.
In addition to sustained US economic optimism and increased expectations of the debt stock after the stimulus, there is uncertainty about whether the Fed will increase emergency regulation in the so-called ‘supplementary leverage ratio’ (SLR), which increases feelings of discomfort.
Higher US yields have pushed the dollar up against other major currencies.
The euro fell to $ 1.1947 from the highest week last year of $ 1.1990, while the dollar held at 109.12 yen, near the nine-month high of 109,235 set last Tuesday.
The British pound slipped 0.25% to $ 1.3934.
reached a record high of $ 61,781 on Saturday, after Reuters reported a senior Indian government official said Delhi would propose a law banning cryptocurrencies, and fining anyone in the country who trades or even owns such digital assets.
Oil prices were supported by production cuts by major oil producers and optimism about demand recovery as the world economy recovered from the pandemic-induced recession.
futures traded at $ 66.23 a barrel, up 0.9% on the day.