Business & Investment

Global equities are close to record highs, US Treasury yields are low for the first time in a month Reuters

© Reuters. File Photo: A TV reporter standing in front of a large screen displaying the stock price of the Tokyo Stock Exchange after the market opens in Tokyo on October 2, 2020. REUTERS / Kim Kyung-Hoon

Hideyuki Sano

Tokyo (Reuters) -Wednesday global stocks remained close to record highs, but U.S. bond yields were higher as investors bet that the FRB was a bit far from shrinking economic stimulus. It was at the lowest level in a month.

MSCI’s global global index topped at 716.64 after hitting a daytime high of 718.19 on Tuesday, driven by rising European stocks.

In Asia, MSCI’s broadest non-Japanese Asia Pacific equity index fell 0.15%, averaging 0.25%.

On Tuesday’s Wall Street, investors focused on Thursday’s inflation data, so was stable and approaching record highs.

Meanwhile, US 10-year bond yields fell to 1.513%, the lowest level in a month, down a quarter point from the 14-month high of 1.776% in March. The most recent value on Wednesday was 1.533%, which has been almost flat so far.

Naoichi Koshimizu, senior interest rate strategist at Nomura Securities, said, “The recovery in the job market is contained, so even if it starts soon, the Federal Reserve Board’s debate about shrinking could gain momentum. It’s low. “

“Therefore, those who were betting on the steepening of the yield curve are shrinking their positions, but some investors are buying to earn carry.”

US salary data last Friday showed that employment isn’t growing as fast as economists expected, despite growing signs of a labor shortage.

Many analysts believe that the Federal Reserve Board will need more evidence of a significant increase in employment in order to strengthen the debate on shrinkage.

The Federal Reserve Board (FRB) said the rise in inflation this quarter was temporary and did not threaten price stability, one of its main missions.

US consumer price data on Thursday is expected to show that overall annual inflation has risen to 4.7% and core inflation has risen to 3.4%.

These measurements are well above the Fed’s inflation target of 2%, but many economists expect inflation to ease in the coming months, and the Fed will take mitigation measures. You can wait before taking it.

However, some investors remain wary that tight a unexpected pressure in the labor market can lead to unexpectedly strong inflationary pressures.

“The US labor market looks very tight. At this point, workers haven’t returned for a variety of reasons, but they will eventually return,” said Shigemi Yoshinori, macro strategist at Fidelity International. As salaries increase, companies need to raise their wages. ”

Major currencies are strong.

The euro was flat at $ 1.2173 and the dollar was at ¥ 109.50.

Investors have diminished expectations that the European Central Bank may show plans to cut asset purchases when it reviews its policies on Thursday.

Oil prices remained strong after US Secretary of State Antony Blinken said that even if the United States reached a nuclear deal with Iran, hundreds of US sanctions on Tehran would be maintained.

Futures trading on Tuesday closed above $ 70 a barrel for the first time since October 2018, ending at $ 70.21, up 0.2%.

Futures rose 0.2% to $ 72.35, maintaining near the highest level since early 2020.

Global equities are close to record highs, US Treasury yields are low for the first time in a month Reuters Global equities are close to record highs, US Treasury yields are low for the first time in a month Reuters

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