Technology restarts stocks and the dollar takes a Thanksgiving break.

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File photo: Pedestrians enter and leave the London Stock Exchange in London, England on August 15, 2017.Reuters / Neil Hall / File Photo

November 25, 2021

Mark Jones

London (Reuters) – Thursday’s tech stock rebound surpassed European stocks, supported by similar rises in Wall Street and Asia, and a slight pull back of the dollar from the 17-month highs.

Due to the closure of the US market due to Thanksgiving, the surge in COVID-19 cases focused on Europe, where the likelihood of a blockade entering the Christmas shopping season is increasing.

These concerns pushed the Pan-European STOXX600 index to a three-week low on Wednesday, but rose almost half a percent as a 1% rise in the tech sector offset the eight-year consecutive decline in travel and leisure stocks.

“We continue to treat all sold-outs as a buy-out opportunity,” said Mary Bateman, Global Market Strategist at State Street Global Markets, adding that corporate earnings are still strong and borrowing costs are still very low. rice field.

The bullish indicators behind the stock market can be seen in the data. Year-to-date inflows into equity funds have exceeded $ 1 trillion, exceeding the sum for the last 19 years, according to BofA strategists.

Germany’s yields are low in the government bond market, which pushes these borrowing costs up, after the Social Democratic Party and former Treasury Minister Olaf Scholz signed a tripartite coalition agreement to steer Europe’s largest on behalf of Angela Merkel on Wednesday. Decreased to. Economy.

It was the first decrease in yield in three days. It soared this week as traders increased their bets that the European Central Bank would join the US Federal Reserve on next year’s rate hike due to rising inflation. [GVD/EUR]

Dark Schmacher, Head of European Macro Research at Natixis, said:

He also flagged a new blockade in Austria and a surge in COVID-19 cases in parts of Germany and elsewhere in Europe.

Thanksgiving calm

A few days after the Turkish lira was hit again, emerging markets were relatively calm, tensions between Russia and Ukraine increased, and the Mexican president gained central bank independence by steering the de facto unknown. I was worried. [EMRG/FRX]

Lira shrugged her initial losses, rising 0.5%, extending Wednesday’s profits. This was the result of a brutal 11 days, with 24% losing streak after President Tayyip Erdogan helped cut interest rates.

The Russian ruble has said Moscow has not turned its back on peace talks in eastern Ukraine, leaving South African rands recovering from the valley of the year, away from recent four-month lows.

Technology recovery initiated by Nasdaq overnight in Asia [.N] This means that the Nikkei Stock Average in Japan rose 0.7% and the Hong Kong Tech Index was able to record a loss of 6 sessions.

However, other share movements were more modest. MSCI’s widest non-Japanese Asia-Pacific stock index ended flat after little movement throughout the day. [.T][.SS]

Fook-Hien Yap, senior investment strategist at Standard Chartered Bank Wealth, said, broadly speaking, “The US dollar is hitting new highs when it comes to regional equity allocations, which is a headwind for emerging market equities. I am paying attention to that. ” management.

The dollar has been trading near the highest price in almost five years against the Japanese currency of 115.3 yen, adding a high of nearly 18 months to the slightly higher euro of 1.1222. [FRX]

Several Federal Reserve Boards have recently stated that if high inflation is maintained, they will accelerate the tapering of central bank bond purchase programs and accept to act more swiftly to raise interest rates. .2-3 Shown by the Policy Council.

“The market is pricing with more than two price increases next year, but I think it’s overly aggressive. We’re looking for about one hike next year,” says Yap. Goldman Sachs expects to raise rates three times next year.

These expectations, though inconsistent, are pushing up US Treasury yields, with the Thanksgiving break benchmark 10-year bond rising to 1.6930% on Wednesday and ending at 1.6427%.

US Treasuries and the US stock market will reopen on Friday, but trading will almost certainly decline due to the shortened sessions.

Meanwhile, OPEC +, which uses more pumps, was ignored as the United States released millions of barrels of oil from its strategic stockpiles in collaboration with China, India, South Korea, Japan and the United Kingdom.

But after more than a week of signals from key players, investors have already put a lot of money on the move. So Brent actually soared on Wednesday. The last deal in London was $ 82 a barrel, up 6% from this week’s lows, but down slightly that day. [O/R]

Spot gold rose 0.17% to 1791 ounces.

(Additional report by Saikat Chatterjee and Sujata Rao in London, Alun John in Hong Kong, edited by Angus MacSwan, William Maclean, Toby Chopra)

Technology restarts stocks and the dollar takes a Thanksgiving break

Source link Technology restarts stocks and the dollar takes a Thanksgiving break

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