© Reuters. ARCHIVE PHOTO: A man wearing a face mask passes through a screen that displays a graph showing the average participation of recent Nikkeis outside a brokerage house, amid the outbreak of coronavirus disease (COVID-19) in Tokyo
By Hideyuki Sano
TOKYO (Reuters) – Global stocks rose on Monday after U.S. President Donald Trump sanctioned a $ 2.3 trillion aid and spending package for the pandemic, stepping back from his previous threat to block the bipartisan bill.
Markets applauded the move, as it will restore unemployment benefits to millions of Americans and prevent a federal government shutdown in the world’s largest economy.
“As the coronavirus pandemic showed little sign of abating, emergency aid was needed to prevent a sharp slowdown in the economy during the first quarter,” said Nobuhiko Kuramochi, market strategist at Mizuho Securities. “It would have been disturbing if we hadn’t had it at the end of the year.”
The US rose 0.62% in its first trade after the Christmas holiday, coming close to a record set last week.
The futures had already reversed losses after a cryptic tweet from Trump – “Good news about Covid Relief Bill. Information to follow” – helped to offset concerns about further delays in stimulus spending.
European equities are expected to follow suit, up 0.42%, although many markets, including London, are closed on Monday.
increased by 0.74%. The broader MSCI index for Asia Pacific stocks outside Japan rose 0.20%, but trade is slow with many markets still closed.
“It is positive for the markets that we no longer have chaos due to the stimulus, considering that there was a chance of a partial government shutdown,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui (NYSE 🙂 DS Asset Management.
“But, on the other hand, the markets have been talking about this stimulus for a long time and I would say that most of it has already been priced.”
Yields on U.S. bonds soared, with yield on 10-year US Treasury bonds rising 1.5 basis points to 0.945%.
The launches of the COVID-19 vaccines are also raising hopes for further economic normalization next year, with Europe launching a mass vaccination campaign on Sunday.
That, for the time being, has cleared alarms about a new highly infectious variant of the virus that has spread in southeastern England and was confirmed in many other countries, including Japan, France and Canada, over the weekend.
COINS AND AMENITIES
The major currencies have changed little.
The dollar is expected to remain under pressure against other, more risky currencies, with investors betting on the continued recovery of the global economy and a prolonged period of loose US monetary policy.
The euro traded at $ 1.2221, just below its biggest 2 1/2 year high of $ 1.22735, while the yen changed hands at 103.42 per dollar.
The British pound changed hands at $ 1.3571, not far from a 2-1 / 2 year high of $ 1.3625, hit earlier this month, after Britain and the European Union arrived. to an agreement on the commercial structure after Brexit.
The precious metals became more alive, as gold jumped more than 1% to $ 1,899.7 an ounce and silver gained about 3% to $ 26.62 an ounce. [GOL/]
“The US stimulus package will boost the economy and lead to risky trading and a weaker dollar, which should support gold,” said Tatsufumi Okoshi, senior commodities strategist at Nomura Securities.
it also extended earnings over the weekend to reach a new high of $ 28,377.94 before returning to $ 27,068, bringing the total value of the cryptocurrency in circulation to over $ 500 billion.
Oil prices fell slightly, with futures falling 0.3% to $ 48.09 a barrel. [O/R]