SYDNEY (Reuters) – Asian stock markets rebounded on Monday as investors bolstered hopes for vaccines to eventually deliver global economic growth, albeit a possible tightening of virus rules for Tokyo removed Japanese stocks from 30-year highs.
After a slow start, the broadest MSCI index of Asia-Pacific equities outside Japan rose 0.8% more to reach another all-time high.
South Korea rose 2% to a record, led by the chip and auto sectors, while Chinese chips added 0.3%.
The E-Mini futures for the S&P 500 were steady after also reaching a record high. EUROSTOXX 50 futures was flat, while FTSE futures rose 0.4%.
Investors continue to rely on central banks to keep their money cheap, while coronavirus vaccines help revive the global economy over time, although much of that optimism is already pricey and the virus continues to spread.
Japan’s Nikkei fell 0.4% with early gains after Prime Minister Yoshihide Suga confirmed that the government was considering a state of emergency for Tokyo and three surrounding prefectures.
Investors are cautiously watching Georgia’s election for two seats in the US Senate on Tuesday, which will determine which party controls the Senate.
If Republicans win one or both, they will retain a weak majority in the House and will be able to block the legislative goals of President-elect Joe Biden and judicial nominations.
“If the Democrats win both races, then-elected Vice President Kamala Harris would have an equal vote, giving the party unified control of the White House and Congress,” CBA analysts noted.
“This would increase the likelihood that a material package of US infrastructure spending would be quickly tracked through Congress.”
The minutes of the December meeting of the Federal Reserve, which will take place on Wednesday, should provide more details on the discussions on the explicit increase of their policy guidance and the chance of a further increase in asset purchases this year. .
SALARY A RISK
The data calendar includes a series of manufacturing surveys around the world that will show how the industry is facing the spread of coronavirus and closely monitored ISM surveys of US factories and services.
Chinese plant activity continued to accelerate in December, although the PMI missed forecasts at 53.0.
Japan’s plant activity stabilized for the first time in two years in December, while Taiwan grew.
On Friday, the US payroll report for December appears, where the average forecasts are only for a modest increase of 100,000.
Analysts such as Barclays are down 50,000 jobs, which would be a shock to the market’s hopes of a speedy recovery.
“A number of emerging indicators indicate a slower pace as the economy closes the year, including data on labor markets where initial claims rose during the December survey,” economist Michael Gapen said in a note.
Such a drop would add pressure to the Fed to ease even more, another burden for the dollar, which is already leaning under the weight of the massive US budget and trade deficits.
The dollar index was last at 89,704, not far from its last 2-1 / 2 year low of 89,515, after falling by almost 7% in 2020.
The euro returned to 1.2252 USD, after reaching profit at the end of last week, when it reached the highest value since the beginning of 2018, at 1.2309 USD. It gained almost 9% compared to 2020.
The dollar fell to 103.02 yen and seemed in danger of testing key support at 102.55. The pound was confirmed at 1.3690 USD, levels last observed in mid-2018.
In the cryptocurrency space, Bitcoin stood at $ 33,102, after reaching an all-time high of $ 34,800.
The dollar’s decline was a support for gold, leaving the metal 1% firmer at $ 1,917 an ounce.
Oil prices stabilized after a few months of solid gains, with Brent resistance hovering around $ 52.50 a barrel. The return left Brent down 21.5% for the year and WTI down 20.5%. [O/R]
On Monday, Brent crude futures rose 36 cents to $ 52.16, while US crude added 32 cents to $ 48.84 a barrel.
Edited by Jane Wardell and Kenneth Maxwell