MILAN / SINGAPORE (Reuters) – Currencies moved tight as rising Govt-19 lawsuits and social restrictions loomed ahead of balanced optimism over the busy Christmas shopping season of next year’s vaccine-driven economic recovery.
The MSCI Global Equity Index, which tracks shares in 49 countries, flattened by 0901 GMT after overnight losses in Asia, although European stocks were able to post small gains after a weak opening.
The number of corona virus deaths in the United States topped 300,000 on Monday as the worst-affected country launched its first immunizations, while strict COVID-19 restrictions were imposed in London.
Following Germany’s tough lockout on Sunday, other countries from France to Italy and the Netherlands began imposing new restrictions on the holidays.
“Corona virus case growth in Europe is accelerating … However, much of Europe will have to face tighter controls from at least mid-January. The Q4 growth quarter will be lost, but that should come as no surprise to anyone,” said AFS researcher Arne Bettymas.
Most Asian markets retreated, with the MSCI index of Asia-Pacific shares outside Japan falling to a record low of 0.4% within a week after hitting record highs in recent weeks.
However, China’s blue chips ended 0.2% higher, helped by bullish industrial data, which expanded for the eighth month in a row as the economic recovery accelerated.
Positive news about vaccines, coupled with the market-friendly results of the US presidential election, has been gaining ground over the past few weeks, boosting global equities.
The MSCI Global Equity Index on Tuesday was just 1.1% above its all-time high, up 11% this year.
Emergency use
Last week, the United States approved its first COVID-19 vaccine for emergency use, developed by Pfizer and Bioendech. The vaccine is already approved in a few countries, including the United Kingdom and Canada.
“We are building a bridge somewhere and making it clear to policymakers, homes and companies about the post-COVID level,” Blackrock Investment Company strategists said in a statement.
“However, disappointing employment data in recent weeks point to term risks as the virus spreads around the United States, which will reduce the resumption,” they said.
On Monday, the S&P 500 reached 0.4%, the Nasdaq Composite 0.5% and the Dow Jones Industrial Average, but fell 0.6%. The e-mini futures for the S&P 500 rose 0.6%.
In the foreign exchange market, the pound fell 0.3% to $ 1.32828 against the dollar after London imposed strict COVID-19 restrictions. The pound rose 0.8% on Monday, hitting a 2 1/2 year high of 35 1.3540, as the UK and Europe agreed to continue Brexit talks.
The dollar traded lower at 2-1 / 2-year levels against key peers as demand for secured assets was flagged. [USD/]
Eurozone bond yields have declined amid concerns about rising COVID-19 cases in key economies.
Germany’s major 10-year bond yields fell to -0.627%, the most recent one-month low of -0.64%, while Italy’s 10-year yields fell to a new low of 0.497%.
U.S. Treasury yields were 0.8964% ahead of the Federal Reserve’s two-day policy meeting on Tuesday.
As US lawmakers struggle to agree on a monetary stimulus package, market expectations are growing that the central bank will further ease monetary policy by expanding its bond-buying program.
Bank of England and Bank of Japan close their 2020 meetings this week.
Gold rose 1% to $ 1,835.9 an ounce.
With tight locks in Europe, the price of Brent crude oil fell 0.3% to $ 50.13, and OPEC predictions that demand will recover slowly next year outweigh the relief from the release of corona virus vaccines.
London copper prices rose 0.3%, supported by China’s strong manufacturing output data.
Danilo Masoni in Milan, Anshuman Dhaka in Singapore, Ed Osmond Compilation