LONDON / SYDNEY (Reuters) – Stocks struggled to gain momentum on Monday as investors waited for major U.S. inflation readings for advice on monetary policy, as bitcoin rebounded from its hammering on news of China’s crackdown on mining and cryptocurrency trading.
European stocks were 0.1% firmer, after gaining support from Friday’s data showing accelerating business growth in Britain and the eurozone for April. The assertion by ECB President Christine Lagarde on the same day that it was still too early for the bank to discuss the liquidation of its € 1.85 trillion stimulus package, also brought its weight to bear. support.
Markets in Austria, Denmark, Hungary, Norway, Switzerland and Germany have been closed for a holiday.
“The eurozone and the UK are starting to explode as their economies reopen,” Bank of Singapore chief economist Mansoor Mohi-uddin said in a note.
“Lower hospitalizations, lower deaths, faster vaccinations and reduced lockdowns are all contributing to a rapid restoration of confidence in Europe.”
The MSCI World Stock Index rallied 0.1%.
The largest MSCI index of Asia-Pacific stocks outside of Japan plunged 0.2% on slow trading. Japan’s Nikkei added 0.2% and Chinese blue chips 0.4%.
Nasdaq futures rose 0.4% and S&P 500 futures strengthened 0.5%.
Sovereign dollar bonds issued by Belarus fell as much as 2 cents after Belarusian authorities forced an airliner to land on Sunday and arrested an opposition journalist who was on board, prompting condemnation from Europe and the United States.
After the strong growth shown by Friday’s surveys of global service sectors, all eyes will be on US personal consumption and inflation figures this week.
A reading of high core inflation would sound the alarm and could reignite discussions on an anticipated reduction by the US Federal Reserve.
The newspaper has a host of Fed speakers this week, including influential Fed Governor Lael Brainard, and markets will be eager to know if they stick to the scenario of patience with politics.
BofA’s monthly survey of fund managers found that a record 69% of respondents expected economic growth and inflation to exceed trend globally.
As a result, managers had pushed into commodities and late cycles, where overweight positions were near 15-year highs, while the most crowded trade was Bitcoin.
“With such optimistic views on growth and inflation, the risk for investors is that growth will slow down and inflation will turn out to be temporary,” BofA analysts said in a note.
“Additionally, technology, seen as crowded fairly recently, is now back to an underweight and would likely benefit if inflation fears abated.”
GOLD IN FAVOR
After losing 13% on Sunday, bitcoin rose 6% on Monday to $ 36,735, but still more than 40% from its all-time high.
It has been in part affected by China’s crackdown on mining and trading the world’s largest cryptocurrency as part of ongoing efforts to prevent speculative and financial risks.
Major currencies were flat in comparison, with the euro holding at $ 1.2197 after repeatedly failing to clear chart resistance around $ 1.2244 last week.
The dollar was idling against the yen at 108.74, stuck between support at 108.56 and resistance around 109.33. Against a basket of currencies, the dollar had stabilized at 89.920 after hitting its lowest since January at 89.646 on Friday.
In bond markets, Lagarde’s dovish comments on Friday kept borrowing costs below recent multi-month highs.
Germany’s benchmark 10-year bond yield edged down to -0.13%, about six basis points below the two-year highs reached last week.
The weakness of the dollar combined with concerns about inflation and the insane volatility of cryptocurrencies to put gold back in favor. The metal was last at $ 1,881 an ounce, after hitting its highest since January.
“The recent mix of a strong US CPI, weak employment and Fed policymakers willing to let inflation out while targeting the employment gap, could remain bullish for some time yet,” he said. said Michael Hsueh, commodities and currency strategist at Deutsche Bank.
“Gold’s rally has been associated with a strong rally in parts of the commodities complex, increasingly represented by agriculture, metals and transportation indices this year, and a high of eight 10-year US inflation expectations.
Oil prices edged up as a storm formed in the Gulf of Mexico and Iran said a three-month nuclear watchdog deal had expired, raising doubts over the future of indirect negotiations that could end US sanctions on Iranian crude exports. [O/R]
Brent was the latest up 1.5% to $ 67.46 per barrel, while US crude added 1.5% to $ 64.54 per barrel.