© Reuters. A passerby wearing a protective face mask appears on the screen showing the Japanese yen versus the US dollar exchange rate and stock prices at a broker in the event of the coronavirus disease (COVID-19) outbreak in Tokyo
By Wayne Cole
SYDNEY (Reuters) – Asian stocks firmed on Monday as some semblance of calm returned to bond markets after last week’s wild ride, while advances in the huge US stimulus package fueled optimism about the global economy.
China’s official manufacturing PMI over the weekend missed forecasts, but investors expect better news from a series of US data due this week, including the February salary report.
The news deliveries of the newly approved COVID-19 vaccine from Johnson & Johnson (NYSE :), which were due to begin on Tuesday, were also positive for sentiment.
MSCI’s broadest index for stocks in the Asia-Pacific region outside Japan rose 0.1% after losing 3.7% last Friday.
rebounded 2.0% while NASDAQ futures rose 0.8% and 0.7%.
US 10-year bond yields declined to 1.40% from their high of 1.61% last week, although they were still 11 basis points higher last week and 50 basis points year-over-year .
“The bond is still moving on Friday as a break in air rather than a catalyst for a move towards calmer waters,” said Rodrigo Catril, senior strategist at NAB.
“Market participants remain nervous about the prospect of higher inflation as economies look to reopen thanks to vaccine rollouts, massive savings, and solid fiscal and monetary support.”
BofA analysts noted that the bear market for bonds is one of the worst in history. The annualized rate of return on 10-year US Treasuries has declined 29% since last August, Australia by 19%, the UK by 16% and Canada by 10%. .
The road was largely owed to expectations of faster growth in the US when Parliament passed President Joe Biden’s $ 1.9 trillion bailout package and sent it to the Senate.
BofA’s US economist Michelle Meyer raised her forecast for economic growth to 6.5% this year and 5% next year, as the bigger stimulus package is likely better, better virus news, and encouraging Data are available.
Virus cases have also declined 72% from the Jan. 12 peak, with hospital admissions following closely behind, BofA added.
Higher US yields coupled with the general shift towards safety helped rebound from a seven-week low of 89.677 to 90.917.
Early Monday the euro held at $ 1.2086, compared to last week’s high of $ 1.2242, while the dollar remained near a six-month high of the yen at $ 106.50.
“Riskier” currencies and commodity currencies rebounded a bit after losing out late last week. The Australian and Canadian dollars rose and emerging markets from Brazil to Turkey looked more stable.
Non-profitable gold was still falling after hitting an eight-month low on Friday en route to its worst month since November 2016. It was most recently at $ 1,737 per ounce, just above a low of around $ 1,716.
Oil prices have expanded their gains ahead of an OPEC meeting this week at which supply could be increased. up 4.8% last week and the WTI up 3.8%, while both were up around 20% overall in February. [O/R]
Brent most recently rose 92 cents to $ 65.34 while it rose 97 cents to $ 62.47 a barrel.