SYDNEY (Reuters) – Asian shares rallied Monday as some calm returned to bond markets after last week’s wild ride, while progress in a major U.S. stimulus package backed optimism about the U.S. economy. global and drive oil prices higher.
China’s official manufacturing PMI missed out over the forecast weekend, but Japanese figures showed the fastest growth in two years. Investors are also counting positive news from a collection of U.S. data due this week, including the February payroll report.
Helping with feeling was the delivery of news about the recently approved Johnson & Johnson COVID-19 vaccine starting Tuesday.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8%, after peeling at 3.7% last Friday.
Japan’s Nikkei added 2.1%, while Chinese blue chips added 0.5%.
NASDAQ futures broke 1.2% and S&P 500 futures 0.9%. EUROSTOXX 50 futures and FTSE futures rose 1.1%.
U.S. 10-year pounds yielded 1.41%, from last week’s high of 1.61%, although they ended last week 11 basis points higher and were up 50 points basis on the year to date.
“Friday’s moving link still feels like a stop for air, rather than a means of moving toward calmer waters,” said Rodrigo Catril, senior strategy expert at NAB.
“Market participants remain concerned about the prospect of higher inflation as economies seek to reopen with the support of vaccine emissions, high levels of savings coupled with strong fiscal and monetary support. ”
Analysts at BofA noted that the bear bond market was now one of the worst recorded by the annual price yield of 10-year U.S. govt bonds down 29% from August last year, with Australia off 19%, UK 16% and Canada 10%.
The outcry was largely expected to accelerate in the U.S. as the House passed out a $ 1.9 trillion coronavirus relief package to President Joe Biden, sending it to the Senate.
U.S. BofA Economist Michelle Meyer raised its forecast for economic growth to 6.5% for this year and 5% next, due to the appearance of the larger stimulus package, better news on the face of the virus and confident data.
Virus cases were also down 72% since the peak of Jan. 12 and hospitals are following closely behind, BofA said.
A higher U.S. yield coupled with the general move to the index index safety helped it return to 90.917 from a seven-week low of 89.677.
On Monday, the euro was stable at $ 1.2086, compared to last week’s peak of $ 1.2242, while the dollar held near a six-month high on the yen at 106.57.
“More risky” currencies and those exposed to commodities broke shortly after hitting at the weekend, with Australian and Canadian dollars up and markets emerging from Brazil to Turkey looking more stable .
Gold that was not yet yielding was a nursing loss after hitting an eight-month low on Friday on the way to its worst month since November 2016. It ended at $ 1,743 an ounce, just above pool around $ 1,716.
Oil prices extended their gains ahead of this week’s OPEC meeting where supply could be increased. Brent gained 4.8% last week and WTI 3.8%, both of which were about 20% higher over February as a whole.
Brent eventually rose $ 1.27 at $ 65.69, while U.S. crude rose $ 1.22 to $ 62.72 a barrel.
Edited by Shri Navaratnam