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© Reuters. FILE PHOTO: Pedestrians in face masks are reflected in an electrical panel displaying stock prices outside a brokerage in a Tokyo shopping district.
By Wayne Cole
SYDNEY (Reuters) – Asian stock markets paused on Monday as reports of a possible tightening of emergency rules due to coronavirus in Tokyo pushed Japanese stocks out of 30-year highs while lifting the safe-haven yen. .
Investors continue to count on central banks to keep the money super cheap, while the launch of coronavirus vaccines helps revive the global economy over time, but much of that optimism is already priced and the virus is gone. cooperating.
it threw its initial earnings to fall 1.1% when Fuji TV reported that the government was considering a state of emergency for the capital Tokyo and three surrounding prefectures.
MSCI’s broader index of Asia Pacific equities outside of Japan rose 0.1%, slightly from an all-time high.
E-Mini futures fell 0.2% after hitting a new all-time high in early trading.
Investors are watching Georgia’s runoff elections for two US Senate seats on Tuesday that will determine which party controls the Senate.
If Republicans win one or both, they will retain a slim majority in the House and may block the legislative goals and judicial nominees of President-elect Joe Biden.
“If Democrats win both races, Vice President-elect Kamala Harris would be the runoff vote, giving the party unified control of the White House and Congress,” CBA analysts said.
“This would increase the likelihood that Congress will quickly pass a significant package of US infrastructure spending.”
Minutes from the Federal Reserve’s December meeting due Wednesday should provide more detail on discussions about how to make its future policy guidance more explicit and the possibility of a further increase in asset purchases this year.
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 ISM surveys of US factories and services.
A survey showed that manufacturing activity in Japan stabilized for the first time in two years in December, while activity in Taiwan rebounded.
On Friday you see the US December payroll report, where the median forecasts are for only a modest 100,000 increase.
Analysts like Barclays (LON 🙂 are projecting a 50,000 job drop, which would be a shock to the market’s hopes for a quick recovery.
“Several incoming indicators on activity point to slower momentum as the economy closes the year, including data on labor markets where initial claims increased during the December survey period,” said economist Michael Gapen in a note.
Such a drop would add pressure on the Fed to relax even further, another burden on the dollar that is already doubling under the weight of the huge US budget and trade deficit.
The latest was 89,786, not far from its recent two-and-a-half-year low of 89,515, having lost nearly 7% in 2020.
The euro rallied slowly to $ 1.2245, having taken profit taking late last week when it hit the highest level since early 2018 at $ 1.2309. It gained almost 9% during 2020.
The dollar fell to 103.02 yen and looked in danger of testing key support at 102.55. The British pound held firm at $ 1.3674, a short distance from its recent high of $ 0.13686.
The dollar’s decline has been supportive for gold, leaving the metal 0.6% firmer at $ 1,910 an ounce.
Oil prices have stabilized after a couple of months of solid gains, with Brent finding resistance around $ 52.50 a barrel. The rally still left Brent down 21.5% for the year and WTI down 20.5%.
On Monday, futures fell 8 cents to $ 51.72, while they were down 12 cents to $ 48.40 a barrel.
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