HONG KONG – Reuters
Oil prices have risen to a 13-month high as a result of deep frosts due to a severe snowstorm in the United States, not only increasing electricity demand but also threatening oil production in Texas.
Asia’s growing stocks have paved the way for renewed optimism in global markets.
The S & P500 futures rose 0.5%, and the MSCI all country world index (ACWI), which has risen every day so far, has risen slightly.
The broadest MSCI index of Asia-Pacific equities outside Japan rose 0.62%, while the Japanese Nikkei rose 1.4% to a 30-year high.
In Hong Kong, the Hang Seng index rose 1.4% to a 32-month high, while Australia’s S & P / ASX200 gained 0.7% per session. Markets in mainland China will remain closed for the holidays until Thursday.
The positive sentiment was extended to Bitcoin, which flirted with crossing the $ 50,000 barrier.
Bitcoin traded at $ 49,323.56 in the Asian afternoon trading session, slightly below the record high of $ 49,715 on Sunday.
JPMorgan Private Bank, the head of Asia’s investment strategy, Alex Wolf, said the ongoing launch of the coronavirus vaccine gives investors confidence that global growth will be protected in 2021.
“This is a positive factor for us to enter the process of economic normalization,” Wolf said.
Ord Minnett Adviser John Milroy said that while stock markets were positive, investors were worried about the future risk of inflation due to stimulus programs from the central bank and existing governments around the world.
“There is a clear meaning that with rates remaining low for some time and investors’ appetite for stocks remaining strong, markets are likely to hold for some time,” Milroy told Reuters.
“Getting traction is the thought that inflation could rise much faster and faster than the Fed currently believes. Then, if the rates increase to combat it, it happens to the stock markets and, of course, to the bond markets. ”
The optimistic view of the economy raised bond yields, with the US Treasury for 10 years gaining 5 basis points to 1.24% in Asian trade, the highest since the end of March.
Investors are awaiting the minutes of the US Federal Reserve meeting in January, due to be released on Wednesday, to confirm its commitment to maintaining its corrupt political position in the near future. This, in turn, is set to keep a sheet of bond yields.
However, some analysts say that investors should pay attention to bond yields.
“If US bond yields continue to rise, stocks could start to hurt,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.
Wolf said JPMorgan’s private bank forecasts US 10-year yields will reach 1.5% by the end of 2021, as investors have again relied on additional economic stimulus that could help global growth prospects. .
“Increasing yields is not a major concern for the rest of the world. The pace of growth is most important from an Asian perspective. If there is a rapid revaluation, then it can have a negative effect on emerging markets, “he said.
US President Joe Biden continues his plan to pump an additional $ 1.9 trillion into the economy to boost market sentiment.
US crude oil futures traded 1.1% at $ 60.11 a barrel.
Additional reporting by Tomo Uetake in Sydney; Edited by Shri Navaratnam and Richard Pullin