Stimulus expects stocks to record; Bitcoin is booming

LONDON / SINGAPORE (Reuters) – New stocks opened higher as investors seized risky assets in anticipation of a US financial stimulus.

File photo: Pedestrians wearing facial masks on an electric board showing stock prices outside a brokerage in a business district of Tokyo, Japan on January 30, 2020. REUTERS / Kim Kyung-Hoon

Financial assets ranging from stocks to safe havens and volatile bitcoin were in a festive mood. Bitcoin hit an all-time high after hitting $ 20,000 level on Wednesday.

Legislators say the U.S. Congress is ending negotiations on a $ 900 billion Covid-19 aid bill that will include stimulant checks for individuals ranging from $ 600 to $ 700.

Such checks issued during the spring cause cash to flow into the stock markets and bitcoin from the punters, helping stocks to recover faster from the COVID-19 blow. A trader in London pointed out new possibilities leading to retail in the stock markets.

The general risk-on mood sent the dollar to a 2-1 / 2 year low against major peers, while the MSCI World Stock Exchange rose to 639.64. The index has risen 16% since the end of October. Since then, multiple COVID-19 vaccine breakthroughs have been announced.

“While we expect the stock to gain more from the good news about vaccine roll outs and US financial support, this is not the case for the US dollar,” said Mark Heffel, chief investment officer at UBS Global Wealth Management.

“We see more (dollar) weakness.”

European stocks and the euro rallied for the fourth consecutive session in 2021, with investors expecting a sharp financial recovery, supported by broader vaccine roll outs and an ultra-easy monetary policy.

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The British pound rose in May 2018 in anticipation of a post-Brexit trade.

In Asia, MSCI’s broader Asia-Pacific stocks outside Japan rose 0.6 percent to record highs. Japan’s Nikkei rose 0.2% to a 29-year high. [.T]

Wall Street stock futures point further upside, with the S&P 500 futures hitting record highs after Nasdaq’s record close on Wednesday.

(Graphic: Global Stock Indicators 2020,)

Santa Rally

Brent crude oil futures rose 1.2 percent to $ 51.71. This is the highest rate since early March. Excessive production concerns and virus concerns before pushing oil prices off a slope. [O/R]

“I doubt the markets are inclined to extend this rally for two reasons,” said Vishnu Varathan, head economist at Mizuho, ​​Singapore, citing US monetary policy support and vaccine roll outs.

“If the new infection numbers don’t go crazy … I think there’s a chance that this year will be called the Santa Rally,” he said.

US Federal Reserve Chairman Jerome Powell on Wednesday vowed to continue investing in the market until the US financial recovery is secure.

Bond traders were disappointed that the federation’s buying program did not extend below the yield curve, with U.S. treasuries selling for longer, but others took it as an indication that the bank would be backed. [US/]

The Swiss National Bank has suspended its broader monetary policy while maintaining the lowest interest rates in the world, and is ready to intervene in the currency despite the US labeling it a currency manipulator.

The Swiss franc was last traded at 0.8835.

The best-performing employment data in Australia put the Aussie at $ 0.7624, the strongest since mid-2018. [AUD/]

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Aussie is also on the upswing as iron ore prices soar and the currencies of Malaysia, Singapore, Thailand, Taiwan, Sweden and Norway have reached milestones. [EMRG/FRX]

The Kiwi rose to its strongest level in early 2018 after New Zealand’s economic growth shattered expectations.

U.S. Treasuries stabilized, yielding 0.9246% on ten-year government bonds.

Cryptocurrency Bitcoin boosted gains after crossing $ 20,000 overnight. It rose 8% to $ 23,058. Investor attraction – which has risen 200% this year – is due to limited supply of resistance against inflation.

Gold rose 0.3 percent to $ 1,869. [GOL/]

Timothy Heritage Editing

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