Global stocks were near record highs on Friday, after strong economic data from the US and China strengthened expectations for a solid global recovery from the coronavirus crisis.
European equities are expected to grow an inch more, with Euro Stoxx futures up 0.1% and British FTSE futures slightly higher.
The largest MSCI index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) rose 0.25%, and Shanghai equities (.SSEC) added 0.6%. The Japanese Nikkei (.N225) rose 0.1%.
MSCI’s largest range of shares (.MIWD00000PUS) rose 0.05% in late Asian trade, remaining just below Thursday’s record high.
“Markets anticipate economic normalization as vaccines will circulate. Stock prices will rise gradually as they look to future gains,” said Tomo Kinoshita, global market strategist at Invesco Asset Management in Tokyo.
Asian markets were largely stable, after China reported record growth of 18.3% in the first quarter, although the figure fell slightly with expectations, while retail sales rebounded sharply last month. Read more
The data has not changed much the view that its rapid expansion is expected to moderate later this year, as the government focuses on reducing financial risks in overheating parts of the economy.
“Regulators could make additional efforts to cool the real estate market and control internal leverage. Fiscal discipline could also be strengthened, leading to a slowdown in local government funding and infrastructure investment.” said Chaoping Zhu, global market strategist at JP Morgan Asset Management in Shanghai.
Overnight US data was also optimistic, with retail sales returning 9.8% in March, bringing its pre-pandemic sales level 17.1% to a record high. Read more
The booming economic outlook was highlighted by other data, including first-time claims for unemployment benefits which fell last week to their lowest level since March 2020.
“The US recovery looks very strong. And now that restaurants and hotels, both labor-intensive, are reopening, we could see strong earnings gains next month,” said Koichi Fujishiro, senior economist at Dai-ichi Life. Research.
Despite strong data, US bond yields have fallen, driven in part by Japanese acquisitions, as a new financial year began this month.
The US Treasury’s 10-year yield fell to 1.529%, the lowest for five weeks on Thursday, and last stood at 1.578%, down from the 14-month high of 1.776% set at the end of March.
“The market has already fully priced in a short-term US economic recovery. And if the Federal Reserve keeps interest rates on hold for the next two to three years, there is no doubt that the carry-over of US bonds would be very attractive compared to the Japanese or eurozone bonds, “said Chotaro Morita, chief fixed income strategist at SMBC Nikko Securities.
The decline in long-term bond yields has benefited equities, especially technology stocks, given the idea that their historically expensive valuations may be justified, as investors would have no choice but to buy shares to offset low bond yields. .
On Wall Street, the S&P 500 (.SPX) advanced 1.11%, while Nasdaq Composite Heavy Technology (.IXIC) added 1.31%, approaching the record high in February.
In the foreign exchange market, lower US yields have been an obstacle to the US dollar.
The euro rose to $ 1.1951 after hitting a six-week high of $ 1.19935 overnight, while the US currency fell to a three-week low of 108.61 yen and last traded at 108 , 89.
Gold also hit a seven-week high of $ 1,769 an ounce, and last reached $ 1,765.50.
Oil prices reached a one-month high on higher demand forecasts from the International Energy Agency (IEA) and OPEC, in addition to positive data from the US and China.
In the long run, Brent gained 0.6% to $ 67.37 a barrel, while US crude rose 0.55% to 63.81 a barrel, both ongoing for their first substantial weekly gains in six .
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