(Bloomberg) — Global stocks rose to a record on reflation bets after Janet Yellen pushed for rapid U.S. stimulus and coronavirus infections slowed across the globe. Brent oil advanced above $60 a barrel for this first time in more than a year.
U.S. equity futures received a boost from comments by Treasury Secretary Yellen on Sunday talk shows that the U.S. can return to full employment in 2022 if it enacts a robust enough relief package. The 30-year Treasury yield rose to the highest in a year, while the pace of U.S. inflation implied by the bond market accelerated to the fastest since 2014.
The Stoxx Europe 600 Index kicked off the week in the green, with Italian equities outperforming as Mario Draghi sets about to form a new national government. Dialog Semiconductor Plc shares jumped after the company agreed to be acquired by Renesas Electronics Corp. In Japan, the Topix index ended Monday at the highest since 1991 amid reports the government may lift its state of emergency early for some areas.
Investors are taking comfort from the continued rollout of vaccines and data suggesting a declining trend in infections in countries like the U.S. A Citigroup Inc. gauge of global risk aversion dropped to its lowest since the pandemic first roiled markets last year. Weaker-than-forecast U.S. jobs data Friday reinforced economic risks as the pandemic lingers, but also highlighted the case for further stimulus.
“Risk sentiment brightened as anticipation over the U.S. stimulus package is growing,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. “Although the scale of the U.S. package is likely to be reduced, the amount will be still substantial to bolster the U.S. economy.”
President Joe Biden is pushing for a mammoth $1.9 trillion economic relief measure. Some commentators, such as former Treasury Secretary Larry Summers, have raised questions about the size of the package and risks such as much faster inflation.
Here are some key events coming up:
Earnings season continues with companies including Honda Motor, Cisco Systems, Societe Generale and L’Oreal.EIA crude oil inventory report comes Wednesday.Sweden will set monetary policy on Wednesday.Federal Reserve Chair Jerome Powell will speak on a webinar Wednesday.The U.S. consumer price index comes Wednesday.Lunar New Year public holidays begin in nations across Asia, with China breaking for a week.Bank of Russia’s policy decision comes Friday.
These are the main moves in markets
Stocks
Futures on the S&P 500 Index increased 0.3% as of 8:14 a.m. London time.The Stoxx Europe 600 Index gained 0.4%.The MSCI Asia Pacific Index rose 0.8%.The MSCI Emerging Market Index climbed 0.3%.
Currencies
The Bloomberg Dollar Spot Index was little changed.The euro was little changed at $1.2047.The British pound was little changed at $1.3738.The onshore yuan strengthened 0.1% to 6.457 per dollar.The Japanese yen weakened 0.1% to 105.49 per dollar.
Bonds
The yield on 10-year Treasuries gained three basis points to 1.19%.The yield on two-year Treasuries climbed less than one basis point to 0.11%.Germany’s 10-year yield gained three basis points to -0.42%.Britain’s 10-year yield jumped five basis points to 0.53%.Japan’s 10-year yield gained one basis point to 0.071%.
Commodities
West Texas Intermediate crude gained 1.3% to $57.57 a barrel.Brent crude gained 1.3% to $60.12 a barrel.Gold strengthened 0.1% to $1,815.54 an ounce.
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