World Stock Markets Were Pushing For A Fourth Day Of Gains

World Stock Markets Were Pushing For A Fourth Day Of Gains

Via Reuters: 

World stock markets were pushing for a fourth day of gains on Thursday as a near one-year high in oil prices, a revitalised dollar and rising bond yields refocused attention on inflation and normalising economies.

With the WallStreetBets/Reddit retail trading tumult having eased this week, markets were back in their comfort zone of corporate earnings, economic data and central bank meetings.

Oil was approaching $60 a barrel after OPEC and its allies extended had production cuts [O/R]. London, Frankfurt and Paris share indexes edged 0.4%-0.5% higher [.EU], and dollar’s renewed swagger shoved the euro under $1.20.[/FRX]

Britain’s sterling also saw its biggest fall in three weeks as traders waited to see whether the Bank of England would formally endorse negative interest rates as a potential future option.

At the end of last year, expectations were building that their introduction could be imminent. But Britain’s speedy COVID-19 vaccine rollout since then has eased those bets.

“The BoE will maintain a quite cautious tone,” said Silvia Dall’Angelo, a senior economist at fund management firm Federated Hermes adding it was likely that the bank would talk about negative rates. “But at this stage there is very little appetite to use this measure.”

Hopes that the COVID pandemic can be brought to heel by extensive vaccination programmes, combined with expectations of unswerving global economic stimulus, has begun to see bond market focus returning to rising debt and possible inflation.

Germany’s 30-year government bond yield on Thursday was almost back in positive territory for the first time since September. The gap between two- and 10-year U.S. Treasury yields at more than a 100 basis points is now the widest in almost three years.

New U.S. President Joe Biden had told House Democrats on Wednesday that he was more concerned that too little would be provided rather than too much when it came to economic relief.

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