LONDON (Reuters) – Global equities remained on track for their best month in history on Friday as recent vaccine progress, Joe Biden’s victory in the US presidential election, hopes for further stimulus, soaring commodities and the falling dollar have all boosted morale.
European markets have felt a tinge of caution as questions arose over AstraZeneca’s COVID-19 vaccine trial data and Poland threatened to veto the new EU budget, but it didn’t was not enough to derail November’s gains [.EU].
German, French, Italian and Spanish stocks all rose and government bond yields remained weak after the European Central Bank raised expectations for further stimulus next month and the Swedish Riksbank surprisingly raised its quantitative easing program.
London’s FTSE was lower all morning amid some last-minute Brexit nerves, but with Wall Street showing a rise after Thanksgiving, MSCI’s main global index was bracing for another record high.
“The sense of risk is reasonable because we have vaccines and easy money,” said Kit Juckes, Societe Generale strategist. “This is the basis of optimism.”
It was not all good news. Australian stocks ended down 0.5% – Treasury Wine Estates were crushed 11.25% as China imposed new tariffs on Australian wine, the latest move in the countries long trade war.
Chinese stocks rose another 0.1% after data showed industrial profits surged at the fastest pace since the start of 2017. South Korean stocks and Japan’s Nikkei rose 0.3%.
British manufacturer AstraZeneca’s coronavirus drug has been touted as a ‘vaccine for the world’ due to its low cost, but the vaccine’s effectiveness is now under more scrutiny, which the researchers say. experts, could delay its approval.
Several scientists questioned the robustness of the results showing that the shot was 90% effective in a subgroup of trial participants who initially mistakenly received a half dose followed by a full dose .
“With the number of global cases (coronavirus) now having passed 60 million … there is certainly difficult ground ahead for the global recovery, and that can create economic scars,” ANZ Bank analysts wrote in a note.
On Brexit, the European Union and Britain said substantial differences remain over a Brexit trade deal, as the EU’s chief negotiator prepares to visit London in a final attempt to avoid a tumultuous finale to the five-year crisis.
The British pound, which has climbed 4% against the dollar this month and the same against the euro since September, fell 0.3% against both to $ 1.3329 and 89.50 pence before the euro. [GBP/]
“Obviously there are still substantial and important differences to be bridged, but we are continuing with that,” British Prime Minister Boris Johnson told reporters. EU chief negotiator Michel Barnier tweeted: “The same important differences persist”.
For a November chart of emerging market equities to remember:
VIRUS VS VACCINE
U.S. stock index futures edged higher as optimism around an economic rebound next year outweighed concern over an expected increase in coronavirus infections during the Thanksgiving holiday. [.N]
U.S. hospitalizations for COVID-19 are on record, and experts warn the gatherings could lead to further infections and deaths.
More than 20 million people across England will be forced to live under the most severe restrictions even after a nationwide lockdown ends on December 2. Partial lockdowns in some European countries have also raised concerns about economic growth.
The chief economist of the European Central Bank underscored the concerns, saying there were “worrying signals” in the financing conditions in Europe for small and medium-sized companies, which pushed down European bond yields.
German 10-year Bund yields traded near their two-week lows on Friday, while Portugal’s 10-year government bond yields touched zero for the first time.
The euro, which last bought $ 1.1924, did little to react as traders largely took into account expectations of further ECB easing next month. [/FRX]
The dollar, which has fallen more than 2.2% so far this month as global sentiment surged, easing demand for the safe haven currency, was near its lowest in nearly three months.
“The Euro-dollar certainly cannot cross $ 1.20 without good news on the trade deal (Brexit),” Societe Generale’s Juckes said.
The yield on benchmark 10-year Treasury bills fell to 0.8586% as some investors sought the safety of holding government debt.
In commodities markets, copper, an indicator of global economic sentiment due to its use in infrastructure, hit a high of nearly seven and a half months. Oil, although up nearly 30% this month, plunged overnight amid oversupply issues, but Brent rallied in London to $ 48 a barrel. [O/R]
Bitcoin, the world’s largest cryptocurrency, stabilized at $ 17,060 after falling 8.4% in the previous session, failing to hit its all-time high of $ 19,666.
The cryptocurrency has hardly reacted to a Financial Times report that Facebook will introduce its own digital currency Libra in a limited format next year.
Bitcoin has risen by around 140% this year, fueled by demand for riskier assets.
Additional reporting by Stanley White in Tokyo; edited by Jan Harvey, Larry KingS