Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil on the boil, stocks and bonds toil

EconomyFeb 04, 2021 07:20AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. First trading day of stock market in Tokyo 2/2

By Marc Jones

LONDON (Reuters) - World stock markets were fighting 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 production cuts [O/R]. London, Frankfurt and Paris share indexes edged 0.1%-0.5% higher, helped by more German stimulus (EU) and as the dollar's renewed swagger shoved the euro back 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 (NYSE:FHI), 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 100 basis points is now the widest in almost three years.

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

Graphics: Markets have rebounded strongly since COVID shock - https://fingfx.thomsonreuters.com/gfx/mkt/bdwpkyxkwpm/Pasted%20image%201612437740705.png

GOOGLE IT

U.S. stock futures were up in Europe. Wall Street had seen the NYSE Fang+ index of leading tech giants hit an intraday record high on Wednesday, thanks to a 7.4% gain in Google parent Alphabet (NASDAQ:GOOGL) following its strong earnings.

But markets had been softer in Asia overnight. MSCI's ex-Japan Asian-Pacific index fell 0.6%, led by 1.3% and 0.4% drops in South Korea and China. Japan's Nikkei lost 1% as it ended a three-day winning streak.

Rising Chinese short-term interest rates kept risk appetite low, though analysts also noted position adjustments before the Lunar New Year starting next week are likely to play a role too.

Higher interest rates have raised worries that Chinese policymakers may be starting to shift to a tighter stance to rein in share prices and property markets.

"There's persistent speculation that the Chinese authorities may want to tighten its policy," said Wang Shenshen, senior strategist at Mizuho Securities.

Markets on the whole have calmed in the past few days with the Cboe Volatility index slipping to its lowest levels in over a week.

As the retail trading frenzy seen last week faded, stock prices of GameStop (NYSE:GME) and other social media favourites have steadied, although cryptocurrency Ethereum has been on a tear ahead of the introduction of futures contracts next week.

Among the mainstream currencies, the dollar hit a near-three-month high versus the Japanese yen of 105.19.

The euro lost 0.4% to $1.1989, having already hit a two-month low overnight.

The single currency had failed to capitalise on improved sentiment in Italy after former European Central Bank chief Mario Draghi accepted the task of trying to form a new government in the country.

Gold fell 1% to $1,810 per ounce though oil continued to advance after the OPEC+ alliance of major producers stuck to a reduced output policy and U.S. crude stockpiles fell to their lowest since March last year.

U.S. crude rose 0.8% to $56.14 per barrel and Brent gained 0.6% to $58.89. Both stood near their highest levels in about a year.

"OPEC have come in and said they are looking to remove the supply but the main driver is markets are starting to price in demand recovery, especially from emerging markets," said Legal & General Investment Management's Justin Onuekwusi.

Oil on the boil, stocks and bonds toil
 

Related Articles

S&P 500 in Holding Pattern Ahead of Fed Decision
S&P 500 in Holding Pattern Ahead of Fed Decision By Investing.com - Jul 28, 2021

By Yasin Ebrahim Investing.com – The S&P 500 remained in a holding pattern Wednesday, as investors awaited the Federal Reserve’s monetary policy decision and commentary from Fed...

The Bullish Case for Abbott Laboratories
The Bullish Case for Abbott Laboratories By StockNews - Jul 28, 2021

Abbott Laboratories (NYSE:ABT) is a renowned player in the medical devices and ancillary healthcare products industry with an impressive dividend payout history. We think the...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Luu Hung
Luu Hung Feb 04, 2021 7:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I like the headline. Sound like rap lol
CT SomyedHengSuay
CT SomyedHengSuay Feb 04, 2021 1:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Dollar index(DXY) Soaring into the sky : 91.300 But...Bitcoin(BTC/USD) The price goes back up to...38'350$ , Oh! Comeon! Reality...If usd rise into the sky ---> bitcoin(BTC) It should be pressured for the price to fall to the bottom.
Dion Argueta
Dion Argueta Feb 04, 2021 12:52AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The lift in Oil prices may give some Oil stocks a lift provided the market doesn't make another huge drop first.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email