The world inventory exchanges will begin at file highs in 2021
© Reuters. FILE PHOTO: Pedestrians wearing face masks displayed on an electric board showing stock prices outside a broker in a Tokyo business district
From Ritvik Carvalho
LONDON (Reuters) – World exchanges hit record highs on Monday, the first day of trading of the new year, as investors hoped vaccine rollouts would ultimately boost a global economy decimated by the COVID-19 pandemic.
The dollar was up almost 1% against the dollar as the greenback recorded its lowest level against a basket of benchmarks since April 2018. It has been hovering over $ 32,000 since mid-March due to a rapid 800% rally.
European stocks opened higher, with 100 up 1.75%, 1.1%, Spain's IBEX up 1.3% and Italy up 0.7%. ()
MSCI's All-Country World Index, which tracks stocks in 49 countries, hit a record high, rising almost half a percent the day after trading began in London.
"The year starts with the end of 2020, a rally with the double V dichotomy (virus vs vaccine) where the hope is that either things will get worse and stimuli increase or things will get better and things will get better while there is no evidence of liquidity drain and tantrum, "said one trader.
Asian stock markets also rallied despite Japan's early gains, falling 0.4% after Prime Minister Yoshihide Suga confirmed the government was considering a state of emergency for Tokyo and three surrounding prefectures as the coronavirus spreads.
Despite optimism about vaccines, investors are still cautious about the virus's path as it continues to spread amid the discovery of a new strain.
"The virus will keep the upper hand for a while," said Karl Steiner, chief quantitative strategist at SEB, noting that vaccinations had an uneven start marked by vaccine shortages, vaccine resistance and delays.
The UK began vaccinating its population on Monday using the COVID-19 shot developed by Oxford University and AstraZeneca (NASDAQ :).
Given the delay between a full vaccine roll-out and a global economic recovery, investors will count on central banks to keep the money cheap.
"We continue to believe stocks can continue to rise in 2021 as monetary and fiscal stimulus measures provide tailwinds and we expect significant earnings growth as the global economy recovers," said Mark Haefele, chief investment officer, UBS Global Wealth Management.
Minutes of the December meeting of the Federal Reserve are due Wednesday and should contain more detailed information on discussions about a more explicit direction of its guidance for the future and the possibility of further increasing asset purchases this year.
The e-mini futures for them were stable after hitting a record high as well.
For a graph of world stocks against viruses: https://fingfx.thomsonreuters.com/gfx/mkt/gjnpwkowwpw/Pasted%20image%201609750407221.png
PAYROLLS A RISK
The data calendar includes a number of manufacturing surveys around the world showing how the industry is dealing with the spread of the coronavirus, as well as the closely watched ISM surveys of U.S. factories and services.
Chinese factory activity continued to accelerate in December despite the PMI missing forecast at 53.0.
Japanese manufacturing stabilized for the first time in two years in December, while Taiwan picked up again.
The US December salary report appears on Friday, in which the median projections are only valid for a modest increase of 100,000 jobs.
Analysts as Barclays (LON 🙂 mean a 50,000 decrease in jobs, which would be a shock to market hopes for an early recovery.
"A number of in-depth indicators of activity suggest slower momentum as the economy closes the year, including data on labor markets where early claims rose during the December survey period," economist Michael Gapen said in a note.
Such a decline would put pressure on the Fed to ease further, another drag on the dollar already easing under the weight of the massive US budget and trade deficits.
In currencies, the euro rose back to $ 1.2281 after encountering profit-taking late last week when it hit $ 1.2309, its highest level since early 2018. Compared to 2020, it increased by almost 9%.
The dollar fell to 102.80 yen. The pound sterling strengthened at $ 1.3690, most recently in mid-2018.
The dollar's decline was a support for gold, leaving the metal 1.3% firmer at $ 1,931 an ounce.
The price of oil continued its surge after a few months of solid gains and topped $ 53 a barrel. (O / R) added 2% to $ 49.52 a barrel.