LONDON (Reuters) – World stock markets peaked on Monday, the first trading day of the new year, as investors hoped vaccine vaccination would eventually yield a global economy reduced by the COVID-19 pandemic.
The Chinese yuan rose nearly 1% against the dollar, while the greenback fell its lowest levels against a basket of peer-to-peer currencies since April 2018. Bitcoin has reached above $ 32,000 due to a dazzling 800% period since mid-March.
European equities opened higher, with the British FTSE 100 up 1.75%, the German DAX up 1.1%, the Spanish IBEX up 1.3% and the Italian FTSE MIB up 0.7%. [.EU]
MSCI’s world index of all countries, which tracks equities in 49 countries, reached a record high and rose almost half a percent the day after trading began in London.
‘The year begins with the end of 2020, an all-around rally with the double V dichotomy (virus against vaccine) that sees the hope that things are getting worse and stimulus increases, or that things are getting better, and well, it’s getting better as long as there is no indication of liquidity withdrawal and a tapered tantrum, ‘a trader said.
Asian stock markets also rose, although the Japanese Nikkei 225 index dropped early gains, down 0.4% after Prime Minister Yoshihide Suga confirmed that the government was considering a state of emergency for Tokyo and three surrounding prefectures as the coronavirus spread.
Despite optimism about vaccines, investors are still cautious about the path of the virus, which is still spreading amid the discovery of a new strain.
“The virus is still prevalent for a while,” said Karl Steiner, chief quantitative strategist at BEE, noting that the vaccinations started unevenly, characterized by vaccine shortages, vaccine resistance and delays.
Britain on Monday vaccinated its population with the COVID-19 shot developed by the University of Oxford and AstraZeneca.
With the backlog between a complete vaccination of vaccines and a global economic recovery, investors will be counting on central banks to keep money cheap.
“We continue to believe that equities have a further room to rise in 2021 as monetary and fiscal stimulus measures provide a downturn, and we expect significant earnings growth as the world economy recovers,” said Mark Haefele, chief investment officer at UBS Global. Wealth Management, said.
Minutes of the Federal Reserve’s December meeting are presented on Wednesday and should provide more details on discussions about the expression of their future policy guidance and the chances of a further increase in asset purchases this year.
E-Mini futures for the S&P 500 were steady after reaching a record high as well.
For graphical representation of world stocks versus virus
PAYMENTS A RISK
The data calendar contains a series of manufacturing surveys around the world, which will show how the industry handles the spread of the coronavirus, and the accurate ISM surveys of US factories and services.
Chinese manufacturing activity continued to accelerate in December, although the PMI missed forecasts at 53.0.
Japanese manufacturing stabilized in December for the first time in two years, while Taiwan picked up.
Friday, the U.S. salary report is seen in December, where average forecasts are only for a moderate increase of 100,000 jobs.
Analysts like Barclays are giving a 50,000 job drop, which will be a shock to hope for a speedy recovery.
“A number of incoming indicators of activity point to a slower momentum as the economy closes the year, including labor market data where initial demands rose during the survey period in December,” economist Michael Gapen said in a note.
Such a drop would put pressure on the Fed to ease further, which is another burden for the dollar, which is already suffering from the weight of the massive US budget and trade deficits.
In currencies, the euro moved back to $ 1.2281, after turning profitable last week when it reached its highest level since early 2018 at $ 1.2309. It has reached almost 9% by 2020.
The dollar slipped to 102.80 yen. Sterling was confirmed to $ 1.3690, levels last seen mid-2018.
The fall in the dollar was a support for gold, which left the metal 1.3% firmer at $ 1,931 per ounce.
Oil prices extended their rise after several months of solid gains, with Brent crossing $ 53 a barrel. [O/R] US crude added 2% to $ 49.52 a barrel.
Reporting by Ritvik Carvalho; additional reporting by Carolyn Cohn in London and Wayne Cole in Sydney; Edited by Toby Chopra