By David Randall
NEW YORK, Jan 19 (Reuters) - Global equity benchmarks and
oil prices rose while U.S. Treasury bonds dipped Wednesday as
investors weighed the likelihood of further U.S. stimulus under
the incoming Biden administration against worsening coronavirus
outbreaks in China and the United States.
U.S. Treasury Secretary nominee Janet Yellen urged lawmakers
to "act big" to save the economy and worry about debt later at a
confirmation hearing Tuesday. Pandemic relief would take priority over tax increases, she
said, while calling for corporations and the wealthy - both
winners from Republican tax cuts in 2017 - to "pay their fair
share".
Investors in European equities welcomed the comments, with
the Euro STOXX 600 .STOXX climbing 0.5.% Luxury stocks gave
the biggest boost, with Richemont CFR.S quarterly sales
climbing 5%, led by strong growth at its jewellery brands in
Asia and the Middle East. The buoyant mood mirrored that in Asia, where MSCI's
Asia-Pacific index outside Japan rose 1% .MIAPJ0000PUS to its
highest ever. Hong Kong's Hang Seng .HSI gained 1.1% to near
its 2019 peak. Australian shares hit a record high .AXJO .
U.S. President-elect Joe Biden, who will be sworn into
office on Wednesday, last week laid out a $1.9 trillion stimulus
package proposal to boost the economy and speed up the
distribution of vaccines.
"They realized that there is some limits to what monetary
policy can do to effect change in the real economy," said
Shaniel Ramjee, senior investment manager at Pictet Asset
Management. "The Fed will continue buying bonds issued by the
U.S. Treasury in order to fund the fiscal programs."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.60%.
In morning trading on Wall Street, the Dow Jones Industrial
Average .DJI rose 99.54 points, or 0.32%, to 31,030.06, the
S&P 500 .SPX gained 23.06 points, or 0.61%, to 3,821.97 and
the Nasdaq Composite .IXIC added 135.91 points, or 1.03%, to
13,333.09
Biden will take office on Wednesday under unprecedented
security measures after the Jan. 6 assault on the Capitol.
The jump in risk assets came as the United States officially
passed 400,000 deaths from the coronavirus since the pandemic
began. The U.S. death toll last week topped 23,000, setting a
new record for the third week in a row.
China, meanwhile, said that it is facing its worst outbreak
of the coronavirus since March 2020.
The dollar index =USD rose 0.125%, with the euro EUR=
down 0.23% to $1.21.
Positioning data showed investors are overwhelmingly short
on the dollar, betting budget and current account deficits will
weigh on the greenback.
Benchmark 10-year notes US10YT=RR last fell 3/32 in price
to yield 1.1023%, from 1.092% late on Tuesday.
Spot gold XAU= added 1.2% to $1,861.86 an ounce.
Italy's benchmark borrowing costs dropped to their lowest in
over a week on Wednesday after Prime Minister Giuseppe Conte
narrowly managed to stay in office - albeit now heading a
minority government. Italian 10-year bond yields dropped to their lowest since
Jan. 11 - before Conte lost his majority - at 0.533%, down 2
basis points on the day. Oil prices rose on hopes that Biden's proposed stimulus will
lift economic output. U.S. crude CLc1 rose 1.26% to $53.65 per barrel and Brent
LCOc1 was at $56.51, up 1.09% on the day.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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