Equities and bond yields rebound; the dollar is showing strength

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 Equities and bond yields rebound;  the dollar is showing strength


LONDON (Reuters) – Global equities and the dollar zigzagged higher on Friday, as hopes of an economic recovery and easing yields in global bond markets this week helped boost morale.

FILE PHOTO: A trading screen is seen after the opening of markets by British Chancellor of the Exchequer Philip Hammond and Chinese Vice Premier Hu Chunhua at the London Stock Exchange in London, Britain on 17 June 2019. REUTERS / Henry Nicholls / Pool

As the last full week of a hectic first quarter drew to a close, traders still watched the world’s costliest traffic jams build up in the Suez Canal and the global number of COVID-19 cases rise again.

Asian stocks had hit a three-month low overnight as Chinese markets rebounded from their latest concerns over relations with the United States, while commodities stocks and commodities stocks jumped nearly 3%. Euro weakness put Europe on track for a fourth consecutive weekly increase.

Eurozone bond yields edged up slightly, but benchmark German bonds were established for their best weekly performance in 3-1 / 2 months, as the bloc’s coronavirus concerns supported its safe-haven assets.

Euro struggles are also a part of it, but dollar bulls are on the line again with the rise of the U.S. vaccination program. The greenback’s rise on Friday meant it had almost recovered its entire fall after the US election. Emerging market currencies had their worst time of year this week.

“We left 2020 with the validation of the consensus view that the dollar would weaken,” said Indosuez Wealth Management chief investment officer Vincent Manuel.

“We woke up in 2021 to the reality that the United States is growing much faster than Europe … so we have a massive divergence.”

Bank of America’s weekly financial flow data showed global investors jumped into this week’s drama. They injected $ 45.6 billion into cash funds, the largest since April 2020, when COVID-19 was spreading like wildfire.

The weekend news feed was slightly friendlier, however.

Data from the US Department of Labor on Thursday showed jobless claims fell to a year-long low last week, a sign that the US economy is poised to grow stronger as that the public health situation improves.

US President Joe Biden’s first official press conference was also a boost as he said he would double his vaccination rollout plan after meeting the previous target of 100 million vaccines 42 days ahead of date. planned.

SUEZ STRIFE

Turkish markets continued to stabilize after the lira’s 9% drop triggered by the latest sacking of central bank chief President Tayyip Erdogan.

Bluechip’s Chinese stocks also rebounded more than 2% after a three-day losing streak that, like emerging market stocks in general, left them at their lowest level of the year.

“All the sanctions (against China) so far have been largely symbolic and are expected to have little economic impact. But the Sino-US confrontation affects market sentiment. It might take some time before they come to a compromise, ”said Yasutada Suzuki, Head of Emerging Markets Investments at Sumitomo Mitsui Bank.

The dollar also hit a new nine-month high against the Japanese yen of 109.44 yen. The euro licked off its wounds at $ 1.1794 after falling to a four-month low on Thursday.

Ongoing efforts to dislodge a stranded tanker in the Suez Canal saw oil prices rebound somewhat after falling 4% on Thursday, although they are on track for their third consecutive week of losses due to the fears of a further reduction in demand.

Besides Europe, major developing economies such as Brazil and India are also grappling with a resurgence of COVID-19 cases.

Brent was at $ 62.62, up 1.08%, US crude was the last up 1.33% to $ 59.35 a barrel, gold was flat and copper, although more 1% higher on the day, was still in its recent range of $ 8,600 to $ 9,200 per tonne.

Shocked by the Suez blockade, tanker shipping rates nearly doubled this week and several ships have been diverted from the vital waterway.

Reporting by Marc Jones; Edited by Andrew Cawthorne

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