Stocks hit record highs on strong economic data

LONDON (Reuters) – Global stocks hit record highs on Tuesday, supported by strong economic data from China and the United States, as currency and bond markets came to a halt after a month of rapid gains in US dollar and bond yields. Treasure.

Stocks, measured by the MSCI All Country World Index of 49 countries, hit an all-time high as European stocks caught up with gains in Asia and Wall Street overnight in their first trading session since the Easter holidays.

The pan-European STOXX 600 index hit a record after opening in Europe.[.EU]

Profit taking pushed Japan’s Nikkei down 1% and dragged down the Shanghai Composite.

The S&P 500 closed Monday at a record high and futures fell 0.2% on Tuesday. [.N]

In the immediate aftermath of an excellent US jobs report on Friday, data for March showed that services activity hit a record high. China’s service sector has also gained momentum with the steepest increase in sales in three months.

“We believe investors need not fear entering the market at all-time highs,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

“We recommend continuing to position yourself for reflation trading as the economic recovery accelerates; Data released Friday showed US non-farm payrolls rose by 916,000 in March, the biggest gain since August. “

Benchmark 10-year US Treasury yield fell to 1.7093%, while the US dollar has mostly missed a large rebound from strong data and held at $ 1.1819 per euro on the day after posting its steepest drop since mid-March.

Elsewhere, Swiss lender Credit Suisse tried to draw a line under its exposure to the hedge fund Archegos Capital implosion, announcing that the debacle would cost it around $ 4.7 billion and two top executives their jobs.

STABLE STATE

Stabilized dollar and Treasury yields continue to charge higher during the first quarter, with an 83 basis point increase in 10-year yields, the largest quarterly gain in a dozen years and a 3.6% increase. in the dollar index, the steepest since 2018..

“The bonds have stabilized now,” said Omkar Joshi, portfolio manager at Opal Capital Management in Sydney, after a strong and rapid sell-off. “I think the markets can continue to function from here.”

Minutes from the US Federal Reserve’s March meeting, slated for Wednesday, are the next focus for bond markets, though they won’t address the latest data surprises and markets have been well ahead of those. Fed projections for low rate years.

Fed funds futures have traded higher next year, while Eurodollar markets have traded higher in December.

“What needs to be proven is how the Fed tightens and reassures its flexible average inflation targeting policy,” said Vishnu Varathan, chief economist at Mizuho Bank in Singapore.

“The last weeks of the dollar’s movement reflect that the markets are advancing despite what the Fed has said.”

Currencies were fairly quiet during the Asian session and held on to small gains in the dollar. The Australian dollar was trading at $ 0.7647 after the central bank kept the policy setting stable, as expected.

The yen was a softer fraction at 110.21 to the dollar, while the British pound hit a two-and-a-half-week high of $ 1.3919. [FRX/]

The dollar wobble helped oil prices rebound some losses suffered Monday on concerns that a new wave of COVID-19 infections in Europe and India could reduce energy demand. [O/R]

Brent crude futures rose 1.4% to $ 62.98 a barrel, while US crude rose 1.5% to $ 59.56 a barrel. Gold was up 0.2% at $ 1,732 an ounce. [GOL/]