* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, Jan 21 (Reuters) - World stocks racked up record
highs on Thursday and the dollar fell as investors bet major
stimulus from new U.S. President Joe Biden and unswerving global
central bank support would cushion the coronavirus's economic
damage.
Europe's traders hoisted the FTSE .FTSE and DAX .GDAXI
0.2% to 0.4% higher .EU and pushed up the euro again
EUR= /FRX as the European Central Bank's first policy meeting
of the year saw no change to its supportive policies.
With Asian stocks reaching new highs overnight and Wall
Street pointing higher again, MSCI's global index covering
nearly 50 countries .MIWD00000PUS added 0.3% to its 76% rally
since the COVID crash last March.
Republicans in the U.S. Congress have indicated they are
willing to work with Biden on his administration's top priority,
a $1.9 trillion U.S. fiscal-stimulus plan. Some remain opposed
to the price tag, but the final amount is still expected to be
worth at least 5% of U.S. gross domestic product.
"Biden has got the benefit of the doubt as far as markets
are concerned and has had for some time," said Shamik Dhar,
chief economist at BNY Mellon investment management.
"The benefit of higher stimulus is viewed as outweighing any
negative impacts of higher corporate taxes and regulation. And I
think they are right to think that. Monetary policy is also
likely to remain loose," he said.
Bond yields barely budged, with debt markets now focusing on
the ECB's meeting, as the bank kept its key "deposit" interest
rate at -0.5% as widely expected, after boosting its 1.85
trillion-euro emergency bond- buying programme by 500 billion
euros ($606.30 billion) in December.
Since then, many European countries, including France and
Germany, have tightened coronavirus lockdown restrictions.
Vaccination programmes have also been slow to ramp up, adding to
the doubts over the speed of economic recovery.
ECB President Christine Lagarde was due to hold a news
conference at 1330 GMT.
"We don't expect many fireworks from the European Central
Bank meeting," ING strategists said, foreseeing "a fairly
uneventful day for the euro," which was up 0.3% at $1.2145 but
well within its recent $1.20 to $1.23 range.
FAANGSTASY LAND
In the currency markets the dollar was off 0.15% against the
yen JPY= at 103.37 amid the expectations of a Biden stimulus
push and after the Bank of Japan left its policies unchanged
overnight.
The broader dollar index =USD was down 0.17% to 90.254,
while benchmark U.S. 10-year Treasury notes US10YT=RR yielded
1.0785%, down from a U.S. close of 1.09% on Wednesday.
Wall Street was set to open riding its latest tech rally.
Netflix shares had surged nearly 17% NFLX.O on Wednesday
after it would no longer need to borrow billions of dollars to
finance its TV shows and movies. Google parent Alphabet GOOGL.O had jumped 5.3% too and
along with Facebook FB.O , Apple AAPL.O , Amazon.com AMZN.O
and Netflix, the so-called FAANGs group added $262 billion,
taking their market cap to $6.15 trillion. There was weekly jobs data to look forward to but most of
the focus was on Biden's policies around the key issues such as
the pandemic response, the economy and trade tensions that
dominated Donald Trump's term over the last four years.
Around the time Biden was sworn in as president on Wednesday
China announced sanctions against "lying and cheating" outgoing
Secretary of State Mike Pompeo and 27 other top officials under
former President Donald Trump.
"Imposing these sanctions on Inauguration Day is seemingly
an attempt to play to partisan divides," Biden's National
Security Council spokeswoman Emily Horne said in a statement to
Reuters.
Mark Rosenberg, CEO of high-frequency political risk data
firm GeoQuant, said rather than an easing of U.S.-China
tensions, the key indicators that his firm monitor currently
point to them worsening further.
"There is a brief stabilisation with the new administration
but then a reacceleration thereafter," Rosenberg said,
highlighting U.S. relations with Taiwan and issues over Hong
Kong and the South China Sea all as flash points. "It looks
particularly volatile in the second half of 2021."
In commodity markets, oil prices eased on an unexpected rise
in U.S. crude stockpiles, though hopes for an economic revival
kept losses in check. U.S. West Texas Intermediate crude CLc1
dipped 0.24% to $53.18 a barrel. Brent crude LCOc1 fell 0.16%
to $55.99 per barrel.
Industrial metals such as copper, nickel and iron ore all
rose while spot gold XAU= was a shade lower at $1,866 per
ounce. GOL/
Full coverage for Eikon readers of the U.S. presidential
transition: https://emea1.apps.cp.thomsonreuters.com/cms/?navid=20856
For multimedia coverage please open https://www.reuters.com/world/us
in a separate browser
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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
Tech's dominance https://tmsnrt.rs/2LLgfmG
Political risk forecast https://tmsnrt.rs/390f6Ah
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