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Shares and bond yields rebound; dollar shows strength

EconomyMar 26, 2021 06:00AM ET
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2/2 © Reuters. Pedestrians and a traffic light stop sign are reflected on a quotation board in Tokyo 2/2

By Marc Jones

LONDON (Reuters) - World shares and the dollar zig-zagged higher on Friday, as hopes for economic recovery and the week’s easing of global bond market yields helped lift the mood.

As the last full week of a hectic first quarter drew to a close, traders were still watching the world's most costly traffic jam build up in the Suez canal and the global COVID-19 case count rising again.

Asian stocks had clawed off a three-month low overnight as Chinese markets rebounded from their latest U.S. relationship worries while a near 3% jump in commodity stocks and weak euro put Europe on course for a fourth straight weekly rise.

Euro zone bond yields edged up but benchmark German bonds were set for their best weekly performance in 3-1/2 months as the bloc's coronavirus woes supported its safe-haven assets.

The euro's struggles are part of that too but the dollar bulls are on the charge again with the U.S. vaccine programme ramping up. The greenback's rise on Friday meant it had almost clawed back all its post-U.S. election fall. Emerging markets currencies have had their worst run of the year this week.

"We left 2020 with the validation of the consensus view the dollar would weaken," said the chief investment officer at Indosuez Wealth Management, Vincent Manuel.

"We have woken up in 2021 facing the reality that the U.S. is growing much quicker than Europe... so we have a massive divergence".

Weekly money flow data from Bank of America (NYSE:BAC) showed global investors have been darting for safety amid this week's drama. They pumped $45.6 billion into cash funds, the largest since April 2020 when COVID-19 was spreading like wildfire.

The end of the week news flow has been slightly more friendly though.

U.S. Labor Department data on Thursday showed claims for unemployment benefits dropped to a one-year low last week, a sign that the U.S. economy is on the verge of stronger growth as the public health situation improves.

U.S. President Joe Biden's first formal news conference was a boost too as he said he would double his vaccination rollout plan after reaching the previous goal of 100 million shots 42 days ahead of schedule.

SUEZ STRIFE

Turkey's markets continued to settle after the lira's 9% slump triggered by President Tayyip Erdogan's latest central bank chief sacking.

Bluechip Chinese stocks rebounded more than 2% too after a three-day losing streak, which, like emerging market shares generally, had left them at the lowest level of the year.

"All the sanctions (on China) so far have been largely symbolic and should have little economic impact. But the Sino-U.S. confrontation is affecting market sentiment. It could take some time for them to come to any compromise," said Yasutada Suzuki, head of emerging market investment at Sumitomo Mitsui (NYSE:SMFG) Bank.

The dollar also rose to a new nine-month high on the Japanese yen of 109.44 yen. The euro licked its wounds at $1.1794 after falling to a four-month low on Thursday.

The ongoing efforts to dislodge a beached tanker in the Suez canal saw oil prices rebound a tad from a 4% drop on Thursday, though they are on course for their third straight week of losses on worries about further reduction in demand.

In addition to Europe, major developing economies such as Brazil and India are also struggling with a resurgence in COVID-19 cases.

Brent was at $62.62, up 1.08%, U.S. crude was last up 1.33% at $59.35 per barrel, gold was flat and copper, though more than 1% higher on the day, was still in its $8,600 - $9,200 a tonne recent range.

Reeling from the blockage in the Suez, shipping rates for oil product tankers have nearly doubled this week, and several vessels were diverted away from the vital waterway.

Shares and bond yields rebound; dollar shows strength
 

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Comments (12)
Simon Liu
Simon Liu Mar 26, 2021 6:18AM ET
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Welcome back, a peaceful world, focusing on saving lives and growing economy.It is good for all investors.
xolani alex
xolani alex Mar 26, 2021 12:36AM ET
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so much optimism by Reuters. However, this is not the whole story.
Notvery Goodathis
Peteymcletey Mar 26, 2021 12:06AM ET
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Biden pre-screens every question...
Frank Cheung
Frank Cheung Mar 26, 2021 12:06AM ET
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Biden should just do what Trump did--take the access badge away. then there won't be any crisco l critical questions asked.
Jokers R Us
Jokers R Us Mar 26, 2021 12:06AM ET
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Biji Rajaku
Biji Rajaku Mar 25, 2021 11:07PM ET
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Whatever the reason, everything is in under control...
AmericaIsKing oftheGalaxy
AmericaIsKing oftheGalaxy Mar 25, 2021 10:17PM ET
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Vaccines don't matter. The banks/institutions will continue to prop up and sale off profit because they are angry they can't horde our billions in their personal bank accounts as the new administration sets out to tax for infrastructure. This is their temper tantrum, and it's far from over.
Ernest Wong CA
Ernest Wong CA Mar 25, 2021 10:10PM ET
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vaccines hopes again??? what hopes??? anything new?
Tarang Shah
Tarang Shah Mar 25, 2021 10:10PM ET
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haha.. when they don't understand, they include hopes! since last 1 year
Luu Hung
Luu Hung Mar 25, 2021 10:10PM ET
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Ok. Reopening hope. Are you ok with it? Lol
Pablo Blanc
Pablo Blanc Mar 25, 2021 10:08PM ET
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Two days ago ****was all coming crahsing down yall scandolous
Jokers R Us
Jokers R Us Mar 25, 2021 9:29PM ET
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A 5 yr old could do a better job as a journalist in todays day and age
Allatra Yiveh
AllatraYiveh Mar 25, 2021 9:26PM ET
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Making article title is easy: ... Market Rise on .... (pick any random available hopium)
Atanu Mondal
Atanu Mondal Mar 25, 2021 9:23PM ET
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this is not a good justification .. manipulation ie being exposed.
Dave Jones
Dave Jones Mar 25, 2021 9:20PM ET
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LMAO again with the vaccine hopes
Ernest Wong CA
Ernest Wong CA Mar 25, 2021 9:20PM ET
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LMAO as vaccine hopes are on everyday headlines
Guinée Bissau Traore
Guinée Bissau Traore Mar 25, 2021 9:10PM ET
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voiture
 
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