SYDNEY (Reuters) – Asian stock markets resumed their rise on Monday, with investors pinning their hopes on vaccines for a global economic recovery, even with a possible tightening of virus rules for Tokyo pulling Japanese stocks from highs. 30 years.
After a slow start, the broader MSCI index for Asia Pacific stocks outside Japan rose 0.8% to reach another historic peak.
South Korea rose 2% to a record high, led by the chip and automotive sectors, while Chinese blue chips added 0.3%.
The E-Mini futures for the S&P 500 remained stable after also reaching a record high. EUROSTOXX 50 futures were flat, while FTSE futures were up 0.4%.
Investors are still counting on central banks to keep money cheap while coronavirus vaccines help revive the global economy over time, although much of that optimism is already priced and the virus is still spreading.
Japan’s Nikkei lost initial gains to fall 0.4% after Prime Minister Yoshihide Suga confirmed that the government was considering a state of emergency for Tokyo and three neighboring prefectures.
Investors are watching carefully the second round of the Georgia election for two seats in the U.S. Senate on Tuesday, which will determine which party controls the Senate.
If Republicans win one or both, they will retain a small majority in the House and can block President-elect Joe Biden’s legislative objectives and judicial nominees.
“If Democrats win both contests, Vice President-elect Kamala Harris will have the casting vote, giving the party unified control of the White House and Congress,” noted CBA analysts.
“This would increase the likelihood that a material US infrastructure spending package will be accelerated in Congress.”
The minutes of the Federal Reserve meeting in December, scheduled for Wednesday, are expected to provide more details on discussions on how to make its future policy guidance more explicit and the chance of a further increase in asset purchases this year.
PAY SHEETS A RISK
The data calendar includes a series of manufacturing surveys around the world, which will show how the industry is dealing with the spread of the coronavirus, and the ISM surveys observed closely at US factories and services.
Activity at Chinese factories continued to accelerate in December, although the PMI lost 53.0 forecasts.
Japan’s manufacturing activity stabilized for the first time in two years in December, while Taiwan recovered.
Friday sees the US December payroll report, where average forecasts are only a modest 100,000 increase.
Analysts like Barclays point to a drop of 50,000 jobs, which would come as a shock to the market’s hopes of a quick recovery.
“A number of new activity indicators point to a slower pace with the close of the year’s economy, including data on labor markets, where initial claims increased during the December survey period,” said economist Michael Gapen on a note.
Such a drop would increase pressure on the Fed to ease even more, another burden on the dollar that is already doubling under the weight of the huge US budget and trade deficits.
The dollar index was at 89.704, not far from its recent 89.515 low in 2-1 / 2 years, having dropped nearly 7% in 2020.
The euro rose again to $ 1.2252, having reached profits at the end of last week, when it reached the highest value since the beginning of 2018, at $ 1.2309. It gained almost 9% in 2020.
The dollar fell to 103.02 yen, and seemed in danger of testing the key support at 102.55. The pound sterling settled at $ 1.3690, levels last seen in mid-2018.
In the cryptocurrency space, Bitcoin settled at $ 33,102, after reaching a historic top of $ 34,800.
The falling dollar has been a support for gold, making the metal 1% firmer at $ 1,917 an ounce.
Oil prices stabilized after a few months of solid gains, with Brent finding resistance at around $ 52.50 a barrel. The recovery still left Brent down 21.5% in the year and WTI down 20.5%. [O/R]
On Monday, Brent oil futures rose 36 cents to $ 52.16, while US oil rose 32 cents to $ 48.84 a barrel.
Editing by Jane Wardell and Kenneth Maxwell