Asian stocks rose to a four-month high on Monday, as investors relied on very cheap liquidity and fiscal stimulus to sustain the global economic recovery, even as coronavirus infections were delayed reopening across the United States.
The broadest MSCI Asia Pacific Index outside Japan rose 1% to its highest level since February. The eyes were hung on Chinese blue chips, which jumped 3%, plus 7% gains last week, to a five-year high. Even the Japanese Nikkei, which lagged behind the soft domestic economy, managed to rise by 1.3%.
“We believe there is a justification for increasing the tactical allocation of Asian stocks in the context of global equity portfolios,” analysts at Nomura Bank wrote in a note.
“We see a number of catalysts that could drive the performance of Asia outside Japan (AeJ) over the performance of US stocks in the near term,” they added. “Better COVID-19 indicators and movement data in the economies / markets that dominate the AeJ should translate into a faster economic recovery versus the US”
The E-Mini futures contract for S&P 500 increased by 0.8%.
The E-Mini futures for S&P 500 rose 0.8%, while EUROSTOXX 50 futures added 1.8% and FTSE futures 1.5%. Most markets gained last week as a bunch of economic data from June exceeded expectations, although coronary virus resurgence in the United States clouded the future.
And in the first four days of July alone, 15 states reported a record increase in new COVID-19 cases, which afflicted nearly 3 million Americans and killed about 130,000, according to Reuters statistics.
“It is very clear that the United States did not control the COVID outbreak as other countries did. By reopening the economy very soon, we have seen a frightening increase in the frequency of new cases,” said Robert Rainey, Chief Financial Officer. Westpac Market Strategy. Analysts estimate that the reopening operations that affect 40% of the U.S. population are now back.
Rene warned that “markets will have to climb over a wall of concern in July as economic activity is likely to ease the V-shaped recovery seen in recent months.” “We must also remember that the relationship between the United States and China is deteriorating significantly.”
Two American aircraft carriers have conducted exercises in the disputed South China Sea
The US Navy said that two American aircraft carriers conducted exercises in the disputed South China Sea on Saturday, as China also conducted military exercises criticized by the US Defense Department and neighboring countries.
Risks, along with continued stimulus from central banks, kept sovereign bonds backed in the face of better economic data, with 10-year US yields holding steady at 0.67% and away from the June high of 0.959%. City analysts estimate that global central banks are likely to buy $ 6 trillion in financial assets over the next twelve months, more than double the previous peak.
The major currencies were largely related to the Dollar Index at 97.189 after having spent an entire month in a comfortable range from 95.714 to 97.808. The dollar was stronger in the yen at 107.72 on Monday, while the euro rose to $ 1.1271.
In commodity markets, gold has benefited from extremely low interest rates around the world as the negative real returns of many bonds make the metal that does not pay interest more attractive.
Spot gold traded at $ 1,772 an ounce, straight from last week’s high of $ 1,778.96. Oil prices were mixed in early trading with Brent crude futures rose 19 cents to $ 42.99 a barrel, while US crude fell 23 cents to $ 40.42 amid concerns that higher cases of corona viruses would reduce fuel demand.