LONDON (Reuters) – Global equities rose for the eleventh consecutive day to peak at optimism over the rollout of COVID-19 vaccines and new fiscal aid from Washington, while tensions in the Middle East peaked of 13 months.
As more people are being vaccinated across key markets like the United States, and US President Joe Biden wants to inject an extra $ 1.9 billion stimulus into the economy, the so-called reflection trade has been gaining momentum in recent days.
On Friday, The Cboe Volatility Index, known as Wall Street’s “fear meter”, ended at its lowest level in almost a year, which on Monday was able to achieve a 0.3% increase for MSCI’s largest benchmark of world equities.
As a result of a stronger, though holiday-depleted, Asian session, Europe’s main indices were a sea of green in early transactions, with the UK FTSE 100 up 1.3%.
With China and Hong Kong’s markets closed for the Moon New Year holiday, Japan’s Nikkei took the lead, climbing 1.9% to regain the 30,000-point level for the first time in more than three decades.
E-mini futures contracts for the S&P 500 were also higher, up 0.4%, although US stock markets will be closed on Monday for the President’s holiday.
Later this week, all eyes will be on the minutes of the US Federal Reserve’s January meeting, where policymakers decided to leave rates unchanged, for an indication of the likely direction of monetary policy.
Those concerned about the impact of market exuberance on the inflation outlook will also need to analyze fresh data, and Britain, Canada and Japan should all report. Friday, the major economies, including the United States, will also announce the Comprehensive Purchasing Managers’ Index (PMI) for February.
“We believe investors should be prepared for volatility ahead, but rather see opportunities as threats,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We recommend that investors stick to their long-term financial plans and continue to put excess cash to work.”
Oil has joined stock markets to push higher and reach its highest level since January 2020, hoping the US stimulus will boost the economy and fuel demand, and after a Saudi-led coalition battle in Yemen, he said he had a explosive-laden bumblebees intercepted by the Iran-aligned Houthi group. [O/R]
Brent crude rose 1.3% to $ 63.24 a barrel. US crude rose 1.9% to $ 60.58, just less than before.
With the risk assets in favor, safe havens fell, with gold 0.3% lower to $ 1,817 per ounce. The German bond yields of ten years also rose to the highest since September, with 4 basis points at -0.387%.
The dollar remained near the two-week low as traders viewed the rate of rebounding of the U.S. economy more cautiously. Against a basket of currencies, it last fell about 0.1%.
Meanwhile, Bitcoin recovered a bit from its overnight weakness to trade 2.3% at $ 47,550.76, below a record high of $ 49,714.66.
Edited by Jacqueline Wong, Alex Richardson, Larry King