SYDNEY (Reuters) – Asian shares traded sideways in Asia on Monday as investors gave a cautious reception to the news, a deal struck on a long-awaited US stimulus bill, although “difficult” Brexit talks are in sight. The agreement was not reached.
Sterling slipped 0.8% to $ 1.3408 after several European countries closed their borders in the UK, as the country entered a tough lockdown to fight a new strain of coronovirus.
Prime Minister Boris Johnson will chair an emergency response meeting on Monday to discuss international travel and the flow of freight within and outside the UK.
In the United States, Republican US Senate Majority Leader Mitch McConnell said an agreement was reached by congressional leaders on a nearly $ 900 billion COVID-19 relief bill.
The news saw the S&P 500 jump futures first, only to fall back flat as the morning progressed.
The largest index of MSCI’s Asia-Pacific shares outside Japan is located on either side of the flat after hitting a string of record peaks. Japan’s Nikkei rose 0.5% after April 1991.
Analysts at Bofoe noted $ 46.4 billion in equity inflows in the latest week, while cash outflows were the largest in four months. Tech stocks had record inflows and large flows into the consumer sector, healthcare, financial, real estate and value stocks.
BofA’s chief investment strategist Michael Hartnett said the first “sell signal” was triggered since February as cash levels fell by 4.0% in the latest Global Fund Manager survey.
“Policy support and profits are increasing, positioning is increasing,” he said in a note. “Expectations for high growth, inflation and low interest rates have become a consensus and investors are positioning for a very clear scenario of low volatility and high growth.”
A raw business
Another popular trade is shortening the US dollar and again the situation was more visible by several measures, bringing some relief to the currency on Monday.
Ned Rumpeltine, European head of FX strategy at TD Securities, said, “FX markets are awaiting the final results of a possible Brexit deal and the US fiscal package.”
“However, we remain biased to USD-selling, kneeling of any ‘good news’ on both fronts.” These factors appear to be fully priced and short-USD trades appear increasingly crowded. “
The dollar index was up 90.147 and away from last week’s trough of 89.723, the lowest since April 2018.
Similarly the euro returned to $ 1.2216, while the dollar was at 103.45 to the yen.
The dollar has also received a lift from a Nikkei report that Japanese Prime Minister Yoshihide Suga told finance ministry officials in November that the dollar had not gone below 100 yen.
The dollar’s stagnation saw little of its recent gain in gold prices at $ 1,883 an ounce. [GOL/]
After a seven-week gain in Europe with demand for travel restrictions, oil prices moved to some profit-making, further shocking demand. [O/R]
US crude fell 79 cents to $ 48.31 a barrel, while Brent crude futures fell 70 cents to $ 51.56.