SINGAPORE / NEW YORK (Reuters) – Bonds catered to losses and Asian stock markets rose on Thursday in anticipation of the Democratic government’s high debt and high-growth spending, following the by-elections. party control of both chambers of the United States Congress.
U.S. Treasuries suffered the strongest sales in months and the S&P 500 index hit a record after Democratic victories in two Georgian races gave them tight Senate control and the power to top their agenda.
MSCI’s broader Asia-Pacific stock index outside Japan rose 0.5% to a record high, led by jumps of more than 1.5% in the heavyweight maker chips from South Korea, Kospi, and the heavy Australian bank, ASX 200.
Japan’s Nikkei rose 2% to its highest since 1990. S&P 500 futures rose 0.6% and Nasdaq 100 futures rose 0.9% as markets seemed to miss a session late New York when the chaotic protests in Washington disagreed with traders. [.N]
“It’s basically a reform trade,” said Mathan Somasundaram, head of Sydney-based research firm Deep Data Analytics, who added that the Democratic sweep was unexpected for most investors and “changes a lot” .
“While it has a very narrow margin, it offers Democrats a two-year term (to follow their agenda),” he said. “Anything that benefits from the price increase will go well … when you look at the policy settings they’re trying to get, it’s about printing (money for) Main Street and not Wall Street.”
Georgia voters chose the first black senator in state history, Raphael Warnock, and the youngest member of the Senate, Jon Ossoff. Along with Vice President Kamala Harris’s tiebreaker vote, the victories allow Democrats to control the chamber.
Subsequent bond sales boosted U.S. Treasury yields to a 10-year benchmark above 1% for the first time since March. On Wednesday it remained at 1.0422%. [US/]
The U.S. dollar also sank as the result became clearer, as foreign exchange operators estimate that the U.S. trade and budget deficits will grow heavily on the greenback. [FRX/]
The dollar hit a three-year low against the $ 1.2349 euro and stood near that level on Thursday. It also fell to multi-year lows against Australians, the Kiwi and the Swiss franc.
CHAPTER CHAOS, DETERMINED CHINA
The exuberance was mitigated by the exhaustion of technological actions, as investors expect the sector to face taxes and regulations and by disturbing scenes of protesters who stormed the Capitol to interrupt the certification of the electoral defeat of Donald Trump.
Wall Street indices relaxed from session highs as police evacuated lawmakers and fought for more than three hours to clear Trump supporters of the Capitol.
“What makes us a little pause is that the economy is still very fragile and I think it’s unlikely that Democrats will have as easy a time as the markets try to predict by approving some of these policies,” Tim said. Chubb, investment director for wealth advisor Girard in Pennsylvania.
Since then, Congress has reconvened to resume electoral certification. Shares on Twitter fell slightly after hours when the social network said it had temporarily blocked Trump’s account for breaching the platform’s rules.
Meanwhile, it appears that U.S. repression against Chinese companies is deepening, with sources telling Reuters that the Trump administration is considering extending investment bans to tech giants Alibaba and Tencent.
Shares of both fell about 3% in Hong Kong and those of three Chinese telecommunications companies that the New York Stock Exchange decided to eliminate after a week of investment also fell sharply.
Oil prices hovered near a ten-month high, taking over after a promised production cut by Saudi Arabia. Brent crude futures rose 0.5% to $ 54.60 a barrel and US crude futures rose 0.8% to $ 51.02 a barrel.
Gold remained stable at $ 1,916 per ounce and bitcoin signature after hitting a new record of $ 37,400.
Reports by Tom Westbrook in Singapore, Imani Moise in New York and Joori Roh in Seoul; Edited by Sam Holmes and Jane Wardell