LONDON (Reuters) – Global stock markets hit record highs on Monday, the first trading day of the new year, as investors hoped the vaccine launch would eventually lift a global economy decimated by the COVID-19 pandemic.
The Chinese yuan rose nearly 1% against the dollar, while the dollar fell its lowest levels against a basket of similar currencies since April 2018. Bitcoin was above $ 32,000 on the back of an 800% rally from mid-March.
European stock markets opened more, with the UK FTSE 100 gaining 1.75%, Germany’s DAX rising 1.1%, Spain’s IBEX rising 1.3%, and Italy’s FTSE MIB increased by 0.7%. [.EU]
The MSCI World Index, which tracks stocks in 49 countries, hit a record high of nearly half a day the day after trading in London began.
“The year begins when 2020 is over, a whole rally with the double dichotomy V (virus vs. vaccine) seeing hopes that either things get worse and the stimulus grows, or things get better and, well, things get better as long as there is no indication liquidity withdrawal and a decrease, “said one trader.
Asian stock markets also gained, although the Japanese Nikkei 225 index fell early gains, down 0.4% after Prime Minister Yoshihide Suga confirmed that the government is considering a state of emergency for Tokyo and three surrounding prefectures. as the coronavirus spreads.
Despite optimism about vaccines, investors continue to be cautious about the path of the virus, which continues to spread amid the discovery of a new strain.
“The virus keeps its hand longer,” said Karl Steiner, chief quantitative strategist at SEB, noting that vaccinations had an uneven start, characterized by a lack of vaccines, vaccine resistance and delays.
The UK began vaccinating its population with the COVID-19 shot developed by Oxford University and AstraZeneca on Monday.
With the gap between the full launch of the vaccine and a global economic recovery, investors will rely on central banks to keep the money cheap.
“We continue to believe that equities have more room for growth in 2021, as monetary and fiscal stimulus measures provide a headwind and we anticipate a significant increase in earnings as the global economy recovers,” said Mark Haefele, CEO. investments in UBS Global Wealth Management.
The minutes of the December meeting of the Federal Reserve are due to be given on Wednesday and should provide more details on the discussions on explicitly increasing their policy guidance and the chance for a further increase in asset purchases this year.
The E-Mini futures for the S&P 500 were steady after also reaching a record high.
For the global stocks chart vs virus:
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.
Japanese production 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 jobs.
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.
In currencies, the euro rose to $ 1.2281, after making a profit at the end of last week, when it reached its highest value since the beginning of 2018, at $ 1.2309. It gained almost 9% compared to 2020.
The dollar fell to 102.80 yen. The pound was confirmed at 1.3690 USD, levels last observed in mid-2018.
The drop in the dollar was a support for gold, leaving the metal 1.3% firmer at $ 1,931 an ounce.
Oil prices widened after several months of solid gains, with Brent hitting $ 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