TOKYO (Reuters) – Global equities traded near a record high on Friday, with Asian stocks taking the lead on Wall Street, as advances in vaccine distribution led to bets on continuing normalization in the global economy and a recovery in earnings.
An index of the 50 most important markets in the world, MSCI ACWI, rose 0.2% to 667.90, reaching a record high of 670.82 reached about two weeks ago. It was the fifth day in a row.
European equities are expected to open on a firm basis, with euro stoxx futures rising 0.3% at the start of trading, while British FTSE futures were flat.
The MSCI range of Asian stocks outside Japan rose 0.6%, while the Japanese Nikkei gained 1.5%.
On Wall Street, each of the major indices rose more than 1% on Thursday, with the Nasdaq Composite index and the S&P 500 setting records.
“What determines the market is that corporate earnings are recovering strongly,” said Jumpei Tanaka, a strategist at Pictet.
“And there are piles of money saved in the MMF (money market funds) and elsewhere, which are likely to be invested in stocks once the economy normalizes as vaccination programs progress.”
(GRAPH: Revenue Recovery -)
Expectations of a strong stimulus by the administration of US President Joe Biden also supported the sense of risk, while better-than-expected data on US job markets, published in the last two days, evokes an alcoholic mood before the salary report to be published at 1330 GMT.
The long-term yields of the US Treasury have risen in anticipation of an emergency bill in Washington, as well as rising inflation expectations.
The 10-year benchmark yield stood at 1.137%, after rising to a three-week high of 1.162% the previous day, while 30-year bonds fell 1.931%, close to its 10-year high. / 2 months of 1.951% reached on Thursday.
Bond yields also rose in Europe, and Germany’s 30-year government bond yield rose to positive territory for the first time since September.
An indicator of the future US inflation market was the highest since October 2018, while that for the euro area reached its highest level since May 2019.
In the foreign exchange market, the dollar strengthened against most of its counterparts as the traders’ focus shifted to the relative strength of US growth.
By recent weeks, the dollar had been sold as expected as a global economic recovery will promote outflows to riskier currencies from the safe haven dollar.
The US dollar index was near a two-month high, after rising 1.1% so far this week, on track for the biggest weekly rise since the end of October.
The euro changed hands at $ 1.1964, hitting a two-month low of $ 1.1952, while the yen hit a 3-1 / 2-month low of $ 105.70.
“It appears that markets are now trying to trade economic normalization based on progress in vaccination,” said Arihiro Nagata, general manager of global investment at Sumitomo Mitsui Bank.
“The fact that the only currencies that do better than the dollar in the last two days are the British pound and the Israeli shekel, the two countries that go further in vaccination, seems to support this.”
The pound was at $ 1.3678, not far from its 2 1/2 year high of $ 1.3759, reached at the end of last month.
The shekel has risen in the past two days, reversing its decline in mid-January, after the Bank of Israel intervened to stop the shekel’s strength after reaching a 24-year high.
The strength of the dollar pushed gold to a two-month low of $ 1,785.10 an ounce on Thursday. The metal was last traded at $ 1,797.40.
Oil has expanded its gains in optimistic economic conditions, declining stocks and OPEC + ‘s decision to maintain its production cuts.
American crude rose 1% to $ 56.80 a barrel, and Brent was $ 59.38, up 0.9%.
Additional reporting by Imani Moise; Edited by Richard Chang, Christian Schmollinger and Ana Nicolaci da Costa