LONDON (Reuters) – World stocks and the dollar zigzagged higher on Friday, as hopes for an economic recovery and moderating yields in global bond markets during the week helped lift spirits.
As the last full week of a hectic first quarter came to a close, traders continued to see the world’s costliest traffic jam piling up at the Suez Canal and the global COVID-19 case count rising again. .
Asian stocks had broken out of a three-month low overnight as Chinese markets rebounded from their latest concerns about relations with the United States, while a jump of about 3% in commodity stocks and weakness of the euro put Europe on track for a fourth consecutive weekly rise.
Eurozone bond yields were up, but benchmark German bonds settled for their best weekly performance in three and a half months as the bloc’s coronavirus woes underpinned its safe-haven assets.
The euro’s struggles are part of that, too, but dollar bulls are in the fray again with the US vaccine program. The dollar’s rise on Friday meant it had almost picked up all of its post-election slump in states. Joined. Emerging market currencies have had their worst run of the year this week.
“We came out of 2020 validating the consensus view that the dollar would weaken,” said Indosuez Wealth Management chief investment officer Vincent Manuel.
“We have woken up in 2021 to the reality that the United States is growing much faster than Europe … so we have a massive divergence.”
Weekly money flow data from Bank of America showed that global investors have been rushing to seek safety amid this week’s drama. They invested $ 45.6 billion in cash funding, the largest since April 2020 when COVID-19 was spreading like wildfire.
However, the weekend news flow has been a bit friendlier.
Data from the U.S. Department of Labor showed Thursday that claims for unemployment benefits fell to a one-year low last week, a sign that the U.S. economy is on the brink of further growth. strong as the public health situation improves.
US President Joe Biden’s first formal press conference was also a boost, as he said he would double down on his vaccine implementation plan after hitting the previous goal of 100 million injections 42 days ahead of schedule.
Turkey’s markets continued to stabilize after the 9% drop in the lira triggered by the latest firing of central bank chairman Tayyip Erdogan.
Bluechip’s Chinese stocks also rallied more than 2% after a three-day losing streak, which, like emerging market stocks generally, left them at their lowest level for the year.
“All the sanctions (against China) so far have been largely symbolic and should have little economic impact. But the Sino-US confrontation is hurting market sentiment. It could take some time for them to reach a compromise, ”said Yasutada Suzuki, head of emerging markets investment at Sumitomo Mitsui Bank.
The dollar also rose to a new nine-month high against the Japanese yen of 109.44 yen. The euro licked its wounds at $ 1.1794 after falling to a four-month low on Thursday.
Ongoing efforts to dislodge a stranded tanker in the Suez Canal saw oil prices rebound a bit from a 4% drop on Thursday, although they are on track for their third consecutive week of losses due to concerns about a further reduction in demand.
In addition to Europe, major developing economies like Brazil and India are also struggling with a resurgence in COVID-19 cases.
Brent was at $ 62.62, up 1.08%, US crude was last up 1.33% at $ 59.35 a barrel, gold was flat and copper, although more than 1% higher on the day, was still in its recent range of $ 8,600 – $ 9,200 a ton.
Recovering from the blockade in Suez, shipping rates for oil product tankers have nearly doubled this week, and several vessels veered off the vital waterway.
Report by Marc Jones; Edited by Andrew Cawthorne