© Reuters. A passerby wearing a protective mask is reflected on the screen displaying the exchange rate of the Japanese yen against the US dollar and stock prices at a brokerage house amid the outbreak of coronavirus disease (COVID-19) in Tokyo
By Wayne Cole
SYDNEY (Reuters) – Asian stocks took hold on Monday, with some appearance of calm returning to the bond markets after last week’s wild run, while progress on the massive US stimulus package sustained optimism about the global economy. .
China’s official manufacturing PMI released over the weekend did not meet predictions, but investors are relying on better news from a series of US data to be released this week, including the February payroll report.
Also helping the sentiment was news delivery of the newly approved COVID-19 vaccine Johnson & Johnson (NYSE 🙂 due to start on Tuesday.
The broader MSCI index for Asia Pacific stocks outside Japan rose 0.1%, after falling 3.7% last Friday.
rose 2.0%, while NASDAQ futures jumped 0.8% and 0.7%.
Yields on 10-year US banknotes fell to 1.40% from last week’s peak of 1.61%, although last week they were up 11 basis points above and rising 50 basis points in the year until now.
“The title move on Friday still feels like a pause to breathe, rather than a catalyst for a move towards calmer waters,” said Rodrigo Catril, senior strategist at NAB.
“Market participants remain nervous about the prospect of higher inflation, as economies are looking to reopen with the help of vaccine launches, high levels of the economy and solid fiscal and monetary support.”
BofA analysts noted that the bearish bond market was now one of the most severe ever recorded, with the 10-year annualized US government bond price return falling 29% since last August, with Australia falling 19%, the United Kingdom 16% and Canada 10%.
The defeat was largely due to expectations of faster US growth when the House approved President Joe Biden’s $ 1.9 trillion coronavirus aid package, sending it to the Senate.
American BofA economist Michelle Meyer has raised her economic growth forecast to 6.5% this year and 5% next year, due to the likelihood of a bigger stimulus package, better virus news and encouraging data.
Virus cases have also dropped 72% since the peak of January 12 and hospitalizations are close behind, added BofA.
Higher US yields combined with the general shift to security helped the recovery to 90,917, from a seven-week low of 89,677.
As early as Monday, the euro was holding at $ 1.2086, compared to last week’s peak at $ 1.2242, while the dollar remained close to the six-month top against the yen, at 106.50.
“Risky” currencies and those exposed to commodities jumped a little after taking a beating at the end of last week, with Australian and Canadian dollars rising and emerging markets from Brazil to Turkey looking more stable.
Unprofitable gold was still suffering losses after hitting an eight-month low on Friday, on its way to its worst month since November 2016. The last price was $ 1,737 an ounce, just above a valley around of $ 1,716.
Oil prices widened their gains ahead of an OPEC meeting this week, where supply could be increased. gained 4.8% last week and WTI 3.8%, while both were about 20% higher compared to February as a whole. [O/R]
Brent rose 92 cents to $ 65.34, while it rose 97 cents to $ 62.47 a barrel.