Global stocks progress gradually on rising bets on faster economic recovery By Reuters

By Hideyuki Sano

TOKYO (Reuters) – Global stock prices edged up as U.S. bond yields moved closer to a 13-month high on Monday, as investors bet U.S. economic growth will pick up after the bill is enacted. $ 1.9 trillion stimulus bill by President Joe Biden last week.

A rollout of COVID-19 vaccines in the United States and some other countries has stoked a bullish mood on risky assets, even as investors mistrust major central bank policy meetings later in the week, including the US Federal Reserve.

“The United States now vaccinates more than three million people a day, with President Biden saying all adults will be able to get the vaccine by May 1. They could soon achieve collective immunity and economic normalization, ”said Norihiro Fujito, principal investment. strategist at Mitsubishi UFJ (NYSE 🙂 Morgan stanley (NYSE 🙂 Securities.

US futures rose 0.2% at the start of Asian trading, trading just below the all-time high reached last week as they rose 0.3%.

Mainland Chinese stocks have distorted the downtrend in trade despite data showing an acceleration in industrial production and an increase in retail sales.

The largest MSCI index of Asia-Pacific stocks outside of Japan rose 0.2%, with Hong Kong leading the gains.

“Most market players and policymakers were surprised at the speed of the recovery. Our estimates are that the US economy will reach pre-COVID-19 production levels by this quarter,” Chetan said. Ahya, Global Head of Economics. a note.

“Fiscal policy does much more than close the production gap. Transfers to households have already outpaced income lost during the recession. As the reopening accelerates, the labor market is on the verge of a sharp rebound . “

The United States House of Representatives approved the COVID-19 relief bill last week, giving Biden his first major victory in office.

Some investors believe that part of the direct payments of $ 1,400 to households could find its way to the stock markets, as appeared to be the case with similar direct payments made last year for relief from the coronavirus.

Investors also suspect that the $ 1.9 trillion package, which represents more than 8% of the country’s GDP, could fuel inflation – at the expense of bonds, especially when their yields are so low.

Rising inflation expectations could prompt the Federal Reserve to signal that it will start raising rates sooner when it announces its latest economic projections at the end of the Federal Open Market Committee (FOMC) meeting on Wednesday.

“Following the fiscal stimulus plans, it is inevitable

that the Fed’s GDP forecast will be revised upwards and that some FOMC members may think rates will have to rise earlier than they expected last December, ”ANZ economists wrote.

The yield on 10-year US Treasuries stood at 1.628%, after hitting 1.642% on Friday, a high last recorded in February of last year.

In addition to continued US economic optimism and heightened debt supply expectations after the stimulus, uncertainties over whether the Fed will extend emergency regulatory easing in the so-called “additional leverage ratio” (SLR ) added to the feeling of unease.

Rising US bond yields caused the dollar to rise against other major currencies.

The euro slipped to $ 1.1947 from last week’s high of $ 1.1990 while the dollar held steady at 109.12 yen, near the nine-month high of 109.235 set last Tuesday .

The British pound slipped 0.25% to $ 1.3934.

briefly slipped to $ 58,742, a record high of $ 61,781 reached on Saturday, after Reuters reported that a senior Indian government official said Delhi would propose a law banning cryptocurrencies, fining anyone in the country or holding such digital assets.

Oil prices have been supported by production cuts by major oil producers and optimism that demand will pick up again as the global economy recovers from the pandemic-induced recession.

futures traded at $ 66.23 per barrel, up 0.9% on the day.