* MSCI all-country world share index at record high
* European indexes climb early on, U.S. futures gain
* Oil crosses $60 a barrel
* Hopes of $1.9 trln U.S. stimulus, vaccines boosting
sentiment
* U.S. dollar retreats from recent highs
* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2021 http://tmsnrt.rs/2egbfVh
*
By Marc Jones
LONDON, Feb 8 (Reuters) - World shares hit a record high on
Monday and oil surpassed $60 a barrel for the first time in a
year, on hopes that a $1.9 trillion COVID-19 aid package will be
passed by U.S. lawmakers as soon as this month.
Even news that South Africa had halted the rollout of
AstraZeneca (NASDAQ:AZN)'s vaccine after a study showed it gave only limited
protection against the country's more contagious variant of the
virus wasn't going to put equity markets off.
MSCI's 50-country index of world stocks .MIWD00000PUS hit
its ninth record high of 2021 overnight as Tokyo's Nikkei
.N225 jumped on talk of Japan relaxing emergency restrictions
.T and as China's markets got busy before the start of the
lunar new year. .SS
Europe then made a strong start as higher oil prices and
inflation expectations lifted basic resource .SXPP and banking
shares .SX7P , and France's Veolia launched a hostile 11.3
billion-euro takeover bid for waste and water rival Suez. .EU
"A generalised risk-on tone is pushing stocks higher,"
UniCredit's analysts said in a note.
Bond markets were focused on how far inflation might rise if
the current mix of stimulus, rising oil and food prices and
expectations for a reopening economies continue to hold.
Ten-year U.S. Treasury yields, which are one of the main
drivers of global borrowing costs, climbed to 1.2%, their
highest since the peak of coronavirus uncertainty last March.
Break-even rates, which are designed to account for inflation,
traded as high as 2.21%, their highest since 2014.
In Europe, Germany's 10-year yields were up 3 basis points
at -0.415% DE10YT=RR , near five-month highs. GVD/EUR
"It will be hard not to see inflation in something when we
get what is likely to be a short-term stimulus boost," Deutsche
Bank's Jim Reid said, referring to planned U.S. stimulus.
"Whether that will be in goods, wages or asset prices or all
three remains to be seen, but it seems inevitable there will be
an impact."
Brent crude LCOc1 touched an intraday high of $60.06 a
barrel, the highest since January last year. O/R
Saudi Arabia's pledge of extra supply cuts in February and
March on the back of reductions by other OPEC members its
allies, including Russia, is helping to balance global markets
and support prices.
In a sign that supplies are tightening, the six-month Brent
spread LCOc1-LCOc7 hit its highest in more than year, $2.45.
OCBC's economist Howie Lee said the Saudis had sent another
"very bullish signal" last week by keeping its Asian prices
unchanged. CRU/OSP
"I don't think anybody dares to short the market when Saudi
is like this," he said.
STIMULUS
Asia's overnight rally had seen Japan's Nikkei .N225 close
up 2%, Chinese blue-chip shares .CSI300 advance 1.3% and
Australian shares finish 0.6% higher.
Wall Street futures were also pointing higher after the
Nasdaq and S&P 500 both climbed to record highs on Friday as
weak monthly U.S. jobs data supported expectations
of stimulus and after some strong corporate earning. .N
U.S. President Joe Biden and his Democratic allies in
Congress forged ahead with their stimulus plan on Friday as
lawmakers approved a budget outline that will allow them to
muscle through in the coming weeks without Republican support.
U.S. Treasury Secretary Janet Yallen predicted the United
States would reach full employment next year if Congress can
pass its support package.
"That's a big call, given full employment is 4.1%, but one
that will sit well with the market at a time when the
vaccination program is being rolled out efficiently in a number
of countries," said Chris Weston, Melbourne-based chief
strategist at Pepperstone.
Expectations of a U.S. economic recovery have not boosted
the dollar, though, "because this shift in prospects is seen by
the market as part of a global recovery," Westpac economists
wrote in a note.
"Investors therefore favour risk taking, and so value the
safety of the U.S. dollar less."
Indeed, the dollar came off a four-month high against the
Japanese yen to be last at 105.50. JPY=
The euro EUR= was weaker at $1.2027 after rising 0.7% on
Friday to a one-week high.
The risk-sensitive Australian dollar AUD=D3 eased from a
one-week high to $0.7675 while South Africa's rand ZAR= fell
nearly 0.5% after its vaccine troubles. EMRG/FRX
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