Shares win as vaccine shields second wave concerns By Reuters

By Tom Westbrook

SYDNEY (Reuters) – Asian stock markets opened higher on Monday, as vaccine optimism offset concerns over rising coronavirus cases in Europe and new lockdowns in the United States, while prices of the oil and currencies at risk also edged up.

Japan’s Nikkei () opened 1% more at the 29-year peak. Australia’s ASX 200 () rose 1% to its highest level in eight months, and the largest MSCI Asia-Pacific equity index outside of Japan () hit its highest level since January 2018.

Futures on S&P 500 () rose 0.7% after the index’s record close on Friday and futures showed a positive start to the week in Hong Kong ().

The US dollar, meanwhile, was slightly lower against the Antipodean currencies. Oil prices have skyrocketed, but not enough to make up for weekend losses amid concerns about the coming winter.

Traders expect more good vaccine news as early as this week from drugmaker Modern (O :), following the successful trial of Pfizer ‘s (N 🙂 similar drug – and that seems enough to allay short-term concerns about the economic damage from the virus.

“There are only mountains of money on the sidelines, waiting to be put to work and since we have this vaccine news, as well as the diminishing risk around the US election, it all turns into stocks. “said Kyle Rodda, analyst at IG Markets. “Everyone now thinks this is the signal to enter.”

President Donald Trump appeared on Sunday to admit losing the US election, but then backtracked and said he was conceding ‘nothing’ as President-elect Joe Biden focused on tackling the coronavirus pandemic .

In North Asia, Japan’s quarterly economic growth has exceeded expectations, while data on China’s industrial production and retail trade is due later today.

Fifteen Asia-Pacific economies, including China and Japan, but excluding the United States, struck a trade deal over the weekend that, though light on details or immediate tariff cuts, is a historic pact for East Asian exporters.

“(The deal) … signals that Asia continues to move forward with trade liberalization even as other regions have become more skeptical,” HSBC economists Frederic Neumann and Shanella Rajanayagam said in a note. .

“As such, it could reinforce a trend already underway for decades: the global economic center of gravity continues to push relentlessly east.”

BREXIT CRUNCH LOOMS, AGAIN

In currency markets, majors were mostly stable with the exception of the pound sterling, which started a nervous week ahead for Brexit trade talks, sliding a bit against the euro () and the dollar. to last at $ 1.3180.

The departure of hardline adviser Dominic Cummings from Downing Street last week may leave more room for British compromises, but chief negotiator David Frost has said on Twitter that the negotiations “may not succeed”.

The negotiations have already passed several deadlines and the next one is looming with the European Union summit on Thursday.

Euro () hit a one-week high of $ 1.1845 in early Asian trade and the yen sitting at 104.66 to the dollar.

The risk-sensitive Australian dollar bought $ 0.7284 and was flat ahead of a week of central bank speeches and important data, starting with Reserve Bank of Australia Governor Philip Lowe at 8:40 a.m. GMT.

A large number of speakers from the US Federal Reserve are also up this week, starting with Vice President Richard Clarida at 19:00 GMT.

The bonds, which sold sharply on vaccine news last week, cut some losses at the New York close on Friday to leave the benchmark 10-year U.S. debt yield () at 0.8930% , after one week greater than 0.97%.

Oil prices edged up, Brent () futures up 0.4% to $ 42.94 a barrel, but below the two-month high of $ 45.30 last week. US crude () rose 0.6% to $ 40.37 per barrel.

Gold held steady at $ 1,890 per ounce.