LONDON (Reuters) – World stock markets rebounded on Wednesday after a spectacular reboot in US tech stocks, with both the US dollar and benchmark government yields rising in the US. Treasury auctions and inflation have outpaced reading later.
But profits fell after a 20% jump in electric car Doyen Tesla on Tuesday, a 4% jump in Nasdaq and a one-day gain in a month for global heavyweights Amazon and Micro .ft.
Asia bounced back from a two-month low as Chinese markets pulled off tight concerns over their recent central bank policy and Europe received a new all-time high for Germany’s DX.
Dollar and bond yields have also deteriorated. Traders focused later on US bond auctions and inflation data, as well as at a meeting of the European Central Bank on Thursday where it is expected to respond to the recent surge in borrowing costs.
Mikhail Zverev, head of global equities at Aviva Investors, said Tuesday the wild move in the U.S. big technology underscored how volatile markets dominated by super-size passive funds are likely this year as the world seeks to reset after seaweed. Is the -19 epidemic.
“The wind is blowing hard now. The world is not a more dangerous place, a slight increase in interest rates is not a catastrophic event … but now there is the mindset of a large crowd with more for circulation.
“They’re moving faster, they’re moving faster and they’re leaving a trail of incompetence,” he added, leaving markets vulnerable to large swings, he added.
Asian stocks gained overnight after Chinese stocks fell to their lowest level since mid-December on the back of tight policy and the prospect of a slow economic recovery.
News near the final approval of the 9 1.9 trillion US coronavirus relief package boosted bond yields globally on Monday. That pushed the Nasdaq down more than 10% from its February 12, confirming an improvement in the index.
After Tuesday’s auction of 58 58 billion in three-year notes, the benchmark yield on the 10-year note was 1.540% on Friday, up from 1.626% on Friday.
Still, as many market investors remain on edge, the next tests of investors ’expectation of government debt are in the form of 10-year and 30-year auctions this weekend.
Naokazu Koshimizu, senior rate strategist at Nomura Securities, said that despite some stability in the bond market, there will be pressure.
“There is a price in the future normalization of the Fed’s monetary policy. The Fed’s policy is ultimately neutral. But its policy has not yet cost the possibility of tightening. “
Some investors in the U.S. No oversupply of the economy and real inflation sees a real risk behind the planned government spending boom.
U.S. Consumer price figures will show a slight uptick in overall inflation in February due to 1330 GMT, with analysts expecting further increases in the coming months due to the underlying effects of a sharp economic downturn in early 2020.
Rapid rollout of COVID-19 vaccines in some countries and planned U.S. The stimulus package helped to understand a brighter global economic outlook, the Organization for Economic Co-operation and Development (OECD) said on Tuesday, predicting its 2021 growth.
In foreign exchange markets, the dollar was supported by expectations of a quick recovery in the US.
The euro eased 0.25% to $ 1.1871, not close to Tuesday’s 3 1/2-month low of $ 1.18355. The yen had touched a nine-month low of 109.235 on the previous day and changed hands at 108.70 against the dollar.
The Australian dollar fell 0.6% to 0.7672 dollars at one point after the country’s top central banker slammed the market over an initial rate hike.
Oil prices have risen 30 percent since the beginning of the year as concerns over supply disruptions eased in Saudi Arabia.
US crude futures reached. 18 a barrel on Monday and Brent crude futures settled at 4 1.4 a barrel on Monday.
Precious metal gold fell 0.1% to 7 1,714.55 an ounce on Tuesday after rising more than 2%.
“There is an element in the action of corrective prices after a very bullish gold rally,” said Ilya Spivak, a strategist at DailyFX Currency.
Reported by Hideyuki Sano in Tokyo and Matt Sffam in New York; Edited by Sam Holmes, Richard Pulin and Ana Nicolasi da Costa