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Asian stocks up on dovish ECB as Biden signs stimulus

EconomyMar 12, 2021 01:10AM ET
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© Reuters. FILE PHOTO: A man walks past a stock quotation board at a brokerage in Tokyo

By Andrew Galbraith

SHANGHAI (Reuters) - Asian shares rose on Friday after U.S. President Joe Biden signed a $1.9 trillion stimulus bill into law, and after a dovish European Central Bank meeting prompted a retreat in bond yields and eased global concerns about rising inflation.

But European shares, which had jumped on Thursday's ECB meeting, looked set to retreat from a one-year peak a day later. Pan-region Euro Stoxx 50 futures were down 0.03% and both German DAX futures and FTSE futures were down about 0.2% in early deals.

Biden signed the stimulus legislation ahead of a televised address in which he pledged aggressive action to speed vaccinations and move the country closer to normality by July 4.

The signing of the American Rescue Plan provided a further boost to market sentiment after the European Central Bank said it was ready to accelerate money-printing to keep a lid on borrowing costs, using its 1.85 trillion euro Pandemic Emergency Purchase Program (PEPP) more generously over the coming months to stop any unwarranted rise in debt financing costs.

That and a better-than-expected U.S. government bond auction could support a rally in tech stocks and a rotation between growth and value stocks in the next few weeks, said Cliff Zhao, chief strategist at China Construction Bank (OTC:CICHF) International in Hong Kong.

"But in the second quarter the market still (will be) very volatile, and especially when we look at the U.S. dollar it's much stronger than expectations around the end of last year. So I think the strong U.S. dollar may weigh on some liquidity conditions in the emerging markets," he said.

MSCI's broadest gauge index of Asia-Pacific shares outside Japan gained 0.53%, supported by tech gains.

Seoul's KOSPI added 1.39%, Taiwan shares were up 0.27% and Australia's ASX 200 gained 0.79%.

Japan's Nikkei rose 1.58%, and China's blue-chip CSI300 index inched up 0.05% as sagging high-valuation tech and consumer firms capped gains.

U.S. Treasury yields were higher on Friday, with the 10-year yield at 1.5512% after falling to 1.475% overnight, its first foray below 1.5% in a week.

The German 10-year yield was last at -0.331% after hitting a three-week low of -0.367%.

"There might be some disappointment (the ECB) didn't expand their bond purchase program but that's largely offset by undertakings to accelerate the purchases," said Michael McCarthy, chief markets strategist at CMC Markets.

On Wall Street, easing inflation worries helped support equities. The Dow Jones Industrial Average rose 0.58% and the S&P 500 gained 1.04%, both to record highs. The Nasdaq Composite added 2.52%.

Sentiment was also boosted by weekly jobless claims data, which pointed to a recovering U.S. labor market as vaccine rollouts helped lead to economic reopenings.

Analysts largely expect inflation to pick up as vaccine rollouts lead to a reopening, but worries persist that Biden's stimulus package could overheat the economy.

The dollar gained 0.22% against the yen to 108.73 and the euro fell 0.18% on the day to $1.1963. The dollar index, which tracks the greenback against a basket of six major rivals, rose 0.14% to 91.568.

Oil prices retreated from sharp gains as the dollar firmed, with U.S. crude dipping 0.41% to $65.75 a barrel. Brent crude lost 0.27% to $69.44 per barrel.

Spot gold prices fell 0.22% to $1,717.70 an ounce.

Asian stocks up on dovish ECB as Biden signs stimulus
 

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Comments (13)
Dave Jones
Dave Jones Mar 12, 2021 2:27AM ET
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I dare you to write truthfully about the 10 year yield!
Sloppy Joe
Sloppy Joe Mar 12, 2021 2:21AM ET
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Maybe investors celebrate the brand new HK election law.....
Oliver Brecht
Oliver Brecht Mar 12, 2021 1:40AM ET
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Asia dors not care about ecb nor US stimulus
Ronaldo Santos
Ronaldo Santos Mar 12, 2021 1:40AM ET
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Sure! With China and Japan, second and third largest economies holding trillion of dollars in foreign bonds, reserves, etc, "they don't care what it is going on in the US and EU", right? Without mentioning their "dependency" for factory goods purchasing by the US and EU... Please, go back to the economy class!
Albertus TjoatjaWidjaja
Albertus TjoatjaWidjaja Mar 12, 2021 12:39AM ET
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https://sg.news.yahoo.com/canada-says-astrazeneca-vaccine-safe-041356116.html
Albertus TjoatjaWidjaja
Albertus TjoatjaWidjaja Mar 12, 2021 12:35AM ET
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https://sg.yahoo.com/news/covid-19-patient-died-experiencing-225632110.html
Jokers R Us
Jokers R Us Mar 11, 2021 11:20PM ET
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Glad to know US taxpayers are boosting asian markets.
Wayne Gillispie
Wayne Gillispie Mar 11, 2021 11:20PM ET
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I’d say, with 30 container ships waiting to dock in LA. Does the USA manufacturer anything anymore. I can’t find anything with a “Made in USA” tag in the HVAC, Automotive, Solar, Battery Industries. Don’t even think about Wal-Mart.
Hoang Nguyen
Hoang Nguyen Mar 11, 2021 11:07PM ET
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Use a different picture! Clearly the picture you guys used the market are crAshing!! Did anyone know that the colors are opposite in asia countries?! Red is up! Green is down!
Jw William
Jw William Mar 11, 2021 11:07PM ET
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nice catch....lol
amar ranjan
amar ranjan Mar 11, 2021 11:05PM ET
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yield was below 1%, NASDAQ was above 12000, yield 1.60% NASDAQ DOES NOT FALL BELOW 12000, YIELD 1.50% NASDQ  RECLAIM 13000, AGAIN YIELD 1.54%. AND WHERE IS NASDAQ??  $360 fall in punters paradise TESLA was the main reason and 20 % fall in APPLE. NO Editor, writer or columnist is blaming for overvaluation? Amazing. They searching secondary reason like Yield
Christos Rammos
Christos Rammos Mar 11, 2021 9:56PM ET
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Ready to fall HARD!
Paul Browning
Paul Browning Mar 11, 2021 9:48PM ET
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Rampant inflation??? You've got to be kidding me. Ten year T-bonds and mortgages at less than 2% and you're worried about inflation? Ever heard about deflation and depression?
amar ranjan
amar ranjan Mar 11, 2021 9:48PM ET
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compare the yield one 1 year before and present yield. You came to know what is coming. QE money was going to super rich which does not change hand. Fiscal Stimulus money is going to middle class and lower class. That money is changing hand. That's why inflation will keep going up. QE has created huge gap between  rich and middle class & lower class, a side effect which is threating financial stability. And it is helping only wall street not main street. Fiscal stimulus will do opposite and create inflation.
Jokers R Us
Jokers R Us Mar 11, 2021 9:48PM ET
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stagflation
Elena Todorova
Elena Todorova Mar 11, 2021 9:48PM ET
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amar ranjan  Fiscal Stimulus is not going to the middle class
Ronaldo Santos
Ronaldo Santos Mar 11, 2021 9:48PM ET
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Amar has a good point, Elena. Yes, fiscal stimulus does go to the lower and low mid classes... $1,200 before, the weekly $$$ unemployment, and now $1,400, plus $300 in addition per week as unemployment... The old EQ policy didn't make the $$$ changing hands, he is right on that. His reasoning does make sense, however, he is not putting in consideration that we've been living for the 10+ years under the "electronic currency", the actual physical money available in the market has decreased..." The credit line", from the US, banks, etc, has increased tremendously! So I disagree with him, we won't have hyper inflation... There isn't a "flood of printing money" in the market to create a disruptive currency supply and demand as people like claim... "Ohhh they are printing money", no, they are not! It is like a credit card with credit line been increased... Otherwise we'd have seen hyper inflation between 2008 and 2016 and the Fed "put" almost $10 T on Wall Street! No inflation, but bubbles!
Biji Rajaku
Biji Rajaku Mar 11, 2021 9:44PM ET
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Whatever the reason, everything is in underwear...
Jokers R Us
Jokers R Us Mar 11, 2021 8:48PM ET
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Just when the markets looked they were ready to roll over they go higher.
Dave Jones
Dave Jones Mar 11, 2021 8:37PM ET
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dip? 30y went up 2%?
 
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