LONDON (Reuters) – Global equities and the dollar rose sharply on Friday as expectations of economic recovery and the week-long easing of global bond market yields helped lift mood.
As the last full week of a hectic first quarter came to an end, traders continued to watch the most expensive traffic jam from the canal to the Suez Canal accumulate and the global COVID-19 case count rise again.
Asian stocks had hit a three-month low overnight as Chinese markets bounced back from their latest U.S.-related concerns, while a jump close to 3% in commodity stocks and a weak euro they put Europe on the fourth consecutive weekly rise.
Eurozone bond yields rose, but benchmark German bonds were set for their best weekly yield in 3-1 / 2 months as the bloc’s coronavirus problems supported its safe haven assets. .
The struggles for the euro are also part of it, but the dollar numbers are once again being loaded with the U.S. vaccine program. The rise in the greenback on Friday meant it had almost recovered all of its fall after the U.S. election. Emerging market currencies have had the worst performance of the year this week.
“We left 2020 with the validation of the consensus vision that the dollar would weaken,” said Indosuez Wealth Management Investment Director Vincent Manuel.
“We woke up in 2021 to the reality that the US is growing much faster than Europe … so we have a massive divergence.”
Bank of America’s weekly cash flow data showed that global investors have been throwing themselves for safety amid this week’s drama. They spent $ 45.6 billion on cash, the largest since April 2020, when COVID-19 spread like wildfire.
The news flow at the end of the week has been a little friendlier.
U.S. Department of Labor data 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 verge of further growth strong as the public health situation improves.
U.S. President Joe Biden’s first formal press conference was also a boost, as he said he would double his vaccine launch plan after reaching the previous target of 100 million shots 42 days earlier. than expected.
SUEZ STRIFE
Turkish markets continued to settle after the 9% drop in the lira caused by the recent dismissal of the head of President Tayyip Erdogan’s central bank.
Bluechip’s Chinese shares also rebounded more than 2% after the three-day streak of losses that, like emerging market shares in general, had left them at the lowest level of the year.
“All the sanctions (against China) so far have been largely symbolic and should have little economic impact. But the Sino-US confrontation affects market sentiment. It could take a while to reach any compromise, ”said Yasutada Suzuki, head of emerging market investments at Sumitomo Mitsui Bank.
The dollar also rose to a nine-month high of the Japanese yen from 109.44 yen. The euro licked its wounds at $ 1.1794 after falling to a four-month low on Thursday.
Ongoing efforts to evict an oil tanker stranded in the Suez Canal saw oil prices rebound slightly from the 4% drop on Thursday, although they are ongoing for its third consecutive week of losses due to concerns about a further reduction in demand.
In addition to Europe, major developing economies such as Brazil and India are also struggling to resurrect COVID-19 cases.
Brent stood at $ 62.62, up 1.08%, US crude rose 1.33% to $ 59.35 a barrel, gold was flat and copper, though that more than 1% more on the day, was still between its $ 8,600 and $ 9,200 per tonne.
Due to the blockade in Suez, tanker shipping rates have doubled almost this week and several vessels have been diverted from the vital waterway.
Marc Jones Reports; Edited by Andrew Cawthorne