Hong Kong: Asian and European markets mostly rose Friday to end a broadly upbeat week, with traders welcoming another forecast-beating reading on US jobless claims that reinforced optimism about the recovery in the world’s top economy.
There was also some cheer from reports that President Joe Biden is planning a $6 trillion budget proposal for later in the day that includes his vast infrastructure deal and spending on families. And while the huge outlays are likely to add to inflationary pressures, investors were happier to look past that, opting instead to focus on the economic boost, while Federal Reserve officials as well as Treasury Secretary Janet Yellen continue to argue that any price spikes will be transitory. Regional equities have enjoyed a broadly positive week as inflation fears and rising virus cases take a back seat to the reflation narrative fuelled by the rollout of vaccines and reopening of economies.
And on Thursday, the Labour Department said 406,000 new seasonally adjusted claims for jobless benefits were made last week, 38,000 down on the week before, much better than predicted and a pandemic low.
US media also reported that Biden will unveil his big-spending plan to give an extra jolt to the economy, even as it enjoys one of its best years of growth in decades. Having passed his $1.9 trillion stimulus soon after taking office this year, the president now has in the pipeline a roads and bridges splurge, which he is aiming to reconcile with Republicans.
Hopes for a deal were given a lift when the Republicans lifted their offer to $928 billion, after Biden lowered his to $1.7 trillion. He also wants to push through a $1.8 trillion American Families Plan. “Of course, what the president would like, and what he will get from Congress could be quite different, but with that level of spending, Asia appears to feel that some of that goody bag will fall their way,” said OANDA’s Jeffrey Halley.
After a positive end for the Dow and S&P 500 in New York, Asia pressed ahead with its recent advances. Tokyo jumped more than two percent, thanks to a weakening yen, while Sydney and Taipei climbed more than one percent apiece. Hong Kong, Singapore, Seoul, Manila, Mumbai, Bangkok and Jakarta were also up but Shanghai and Wellington dipped. Paris opened slightly higher, despite data showing the French economy shrank in the first three months of the year, reversing a previous estimate that it had grown. London and Frankfurt also rose.
Oil prices held on to Thursday’s strong gains, with WTI enjoying further buying after its highest close since October 2018, fuelled by bets that the global recovery will boost demand for the black gold, while traders were also eyeing the start of the upcoming US driving season next month. Brent was also fighting to break back above $70 a barrel, helped by easing concerns that any possible Iran nuclear deal will see a splurge of fresh supplies in the world market. “The momentum is there,” Howie Lee, at Oversea-Chinese Banking Corp, said, adding that dealers believe the market “will be able to absorb whatever excess supply comes in”.
Karachi, 23 December 2024 – Sonraj hosted a star-studded event to celebrate legacy of OMEGA,…
Pakistan’s healthcare system is grappling with persistent challenges, leaving millions of citizens without adequate access…
The International Court of Justice (ICJ) held historic hearings from December 2 to 13 addressing…
A new undersea internet cable is being installed, promising to significantly enhance internet speed and…
Until a few months ago, we were worried about being conveniently left out of a…
Leave a Comment