Reuters. People wearing protective face masks after a coronavirus outbreak are reflected on a screen showing the Nikkei index, outside a brokerage in Tokyo.
By Caroline Cohen
LONDON (Reuters) – World stocks rose on Wednesday on the prospect of an effective coronavirus vaccine and further US financial stimulus as the safe-haven dollar reached its lowest level in more than a year.
European stocks and the euro also rallied after better-than-expected PMI economic data, and the European Central Bank decided on Tuesday to allow eurozone banks to pay dividends again if they have enough capital.
Markets will later turn their attention to the US Federal Reserve as it hints at an expansion of its stimulus program and thinks the economy will suffer a double-dip recession or follow a vaccine-induced boom.
“We’re not expecting a lot of fireworks from the Fed today – they’ve already engineered very simple financial conditions and the tone of their messaging is becoming increasingly harsh,” said senior strategist Marija Vertima. State Street (NYSE 🙂 Global Markets. “In this meeting … not likely to change.”
Europe’s strong open shocks rose 1% to a nine-month high, with the UK jumping 1.3%.
The MSCI World Stock Index rose 0.4% to a record high of 636.64. The index has risen 15% since the beginning of November, driven by a trillion-dollar global stimulus and a more positive outlook.
The MSCI Broadest Index of Asia Pacific shares outside of Japan has followed Wall Street’s recent rise by 0.9%. The sector is also close to record highs in December and up to 3.8% in December, giving it a track record of the best annual performance since 2017.
After the Dow rose 1.1% overnight and the S&P 500 and Nasdaq rose 1.3%, e-mini futures are up 0.25%. ().
Nancy Pelosi, chairperson of the House of Representatives, invited other congressional leaders to meet late Tuesday to sign an implementation agreement this week, raising optimism about a 1. 1.4 trillion spending package.
The difference is that the deal is more than the 500 500 billion proposed by Republicans and less than the 900 900 billion proposed by the Joint Republican / Democrat Committee, said Sebastian Galli, macro strategist at Nordia Asset Management. “It’s well-received by the markets, but the size of the financial package is an issue.”
Shot in the hand
The progress of vaccine rotation continued even after Modern (Nasdaq 🙂 Inc.’s KVID-19 vaccine was set for regulatory authorization this week.
It also expanded its rollout of a new approved vaccine developed by the United States Pfizer Inc. (NYSE 🙂 and Biotech SE (Nasdaq :).
Analysts expect guidance the next day on when and how the Fed may change its bond purchases.
Against the basket of currencies, April fell to its lowest level since April 2018. “High expectations show that the Fed will continue to deliver a loose monetary policy message for the foreseeable future,” said Derek Halpeni, MUFG’s head of research.
The euro rose above 1.22 for the first time since April 2018, and the euro zone bond yield rose after showing better-than-expected business activity during the month. [GVD/EUR]
The pound hit a 12-day high against the dollar and a one-week high against the euro. European Commission President Ursula von der Leyen said progress had been made on the Brexit trade deal and that it had been achieved after the next few days would be crucial.
The dollar hit a two-and-a-half month low of 103.30 against the Japanese yen.
Stock markets in Asia saw a rally. Australian stocks rose 0.8%, South Korea 0.4% and 0.2%.
China’s blue-chip CSI 300 index rose 0.15% and Hong Kong’s 0.86%.
Gold in commodities rose 0.4% to 1, 1,860.20 an ounce. [GOL/]
Gold has risen more than 22% so far this year amid unprecedented government stimulus globally.
Lips slipped 3 cents to .7 50.73 a barrel and fell 1 percent to 47 47.61. They were captured by surprising gains in crude oil inventories in the United States and continued investor concerns about fuel demand shrinking amid tight lockdowns to prevent a coronavirus epidemic in Europe. [O/R]
