LONDON (Reuters) – World equities hit record highs on Tuesday, supported by strong economic data from China and the United States, while the foreign exchange and bond markets stopped to breathe after a month of rapid gains in dollar and foreign exchange earnings. Treasure.
The shares, as measured by the MSCI All Country World index, from 49 countries, reached an all-time high, with European stocks rebounding from gains in Asia and Wall Street overnight in their first trading session since the Easter holiday.
The pan-European index STOXX 600 broke a record after opening in Europe.[.EU]
Profit-taking pushed the Nikkei of Japan down 1% and dragged the Shanghai Composite.
The S&P 500 closed Monday at a record high and futures fell 0.2% on Tuesday. [.N]
In the wake of a major US employment report on Friday, March data showed that service activity reached a record high. China’s service sector also gained momentum with the biggest increase in sales in three months.
“We think investors should not be afraid to enter the market at historic highs,” said Mark Haefele, Chief Investment Officer, UBS Global Wealth Management.
“We recommend continuing to position yourself for the reflective trade as the economic recovery intensifies – data released on Friday showed that US non-farm payrolls increased by 916,000 in March, the biggest gain since August . “
Yield on 10-year US Treasury bonds fell to 1.7093%, while the US dollar lost much of the strong data and remained at $ 1.1819 per euro per day, after registering its sharpest decline since mid-2010. March.
Elsewhere, Swiss lender Credit Suisse tried to draw a line under its exposure to the implosion of the hedge fund Archegos Capital, announcing that the disaster would cost about $ 4.7 billion and two senior executives their jobs.
STEADY STATE
The stability of Treasury and dollar yields follows a higher charge in the first quarter, with an increase of 83 basis points in 10-year earnings, the biggest quarterly gain in a dozen years and a 3.6% rise in dollar index – the sharpest since 2018.
“The bonds have now stabilized,” said Omkar Joshi, portfolio manager at Opal Capital Management in Sydney, after a quick and strong sale. “I think the markets can continue to grow from here.”
Minutes from the March meeting of the U.S. Federal Reserve, scheduled for Wednesday, are the next focus for the bond markets, although they do not address the latest data surprises and the markets are well ahead of the Fed’s projections for years to come. low rates.
Fed Fund futures saw a rise next year, while the euro-dollar markets are priced in December.
“What needs to be tested is how the Fed enforces and eases its policy of flexible average inflation targets,” said Vishnu Varathan, chief economist at Mizuho Bank in Singapore.
“The movement of the dollar in recent weeks reflects the advance of the markets, despite what the Fed said.”
The currencies remained quite calm during the Asian session and remained in small gains against the dollar. The Australian dollar traded at $ 0.7647 after the central bank kept policy settings stable, as expected.
The yen was a weaker fraction at 110.21 per dollar, while the pound reached a two and a half week high of $ 1.3919. [FRX/]
The fluctuation of the dollar helped oil prices to recover some losses suffered on Monday with concerns that a new wave of COVID-19 infections in Europe and India could reduce energy demand. [O/R]
Brent oil futures were up 1.4% to $ 62.98 a barrel, while US oil rose 1.5% to $ 59.56 a barrel. Gold fell 0.2% to $ 1,732 an ounce. [GOL/]
Reporting by Ritvik Carvalho; additional reporting by Thyagaraju Adinarayan in London; and Tom Westbrook in Singapore; Nick Macfie Edition