ANL 31.35 Decreased By ▼ -0.20 (-0.63%)
ASC 20.90 Increased By ▲ 0.10 (0.48%)
ASL 23.90 Decreased By ▼ -0.10 (-0.42%)
BOP 8.41 Increased By ▲ 0.24 (2.94%)
BYCO 10.04 Decreased By ▼ -0.20 (-1.95%)
FCCL 22.20 Decreased By ▼ -0.40 (-1.77%)
FFBL 27.44 Increased By ▲ 0.24 (0.88%)
FFL 20.79 Decreased By ▼ -0.41 (-1.93%)
FNEL 8.85 Decreased By ▼ -0.33 (-3.59%)
GGGL 27.45 Decreased By ▼ -0.58 (-2.07%)
GGL 47.10 Increased By ▲ 0.35 (0.75%)
HUMNL 7.40 Decreased By ▼ -0.15 (-1.99%)
JSCL 22.50 Decreased By ▼ -0.43 (-1.88%)
KAPCO 39.80 Decreased By ▼ -0.30 (-0.75%)
KEL 3.92 Decreased By ▼ -0.02 (-0.51%)
MDTL 3.73 Decreased By ▼ -0.08 (-2.1%)
MLCF 44.27 Decreased By ▼ -0.83 (-1.84%)
NETSOL 165.95 Decreased By ▼ -1.40 (-0.84%)
PACE 7.67 Decreased By ▼ -0.36 (-4.48%)
PAEL 34.01 Decreased By ▼ -0.86 (-2.47%)
PIBTL 11.25 Decreased By ▼ -0.10 (-0.88%)
POWER 9.20 Decreased By ▼ -0.15 (-1.6%)
PRL 23.80 Decreased By ▼ -0.33 (-1.37%)
PTC 11.73 Decreased By ▼ -0.02 (-0.17%)
SILK 1.82 Decreased By ▼ -0.01 (-0.55%)
SNGP 49.60 Decreased By ▼ -1.58 (-3.09%)
TELE 15.06 Decreased By ▼ -0.51 (-3.28%)
TRG 166.20 Decreased By ▼ -1.86 (-1.11%)
UNITY 42.97 Decreased By ▼ -0.87 (-1.98%)
WTL 3.74 Decreased By ▼ -0.08 (-2.09%)
BR100 5,167 Decreased By ▼ -9.46 (-0.18%)
BR30 26,489 Decreased By ▼ -221.93 (-0.83%)
KSE100 47,687 Increased By ▲ 14.31 (0.03%)
KSE30 19,130 Increased By ▲ 22.74 (0.12%)

Coronavirus
VERY HIGH Source: covid.gov.pk
Pakistan Deaths
23,087
3924hr
Pakistan Cases
1,011,708
3,26224hr
6.6% positivity
Sindh
369,245
Punjab
353,695
Balochistan
29,681
Islamabad
85,947
KPK
142,139
Markets

World stocks near record high as investors await dovish Fed act

  • Meantime, oil prices held near multi-year highs on an improved outlook for worldwide fuel demand.
14 Jun 2021

TOKYO: Global shares held firm near record highs on Monday while US bond yields flirted with three-month lows as investors expect the Federal Reserve to stick to its dovish mantra later this week.

Japan's Nikkei rose 0.35% while MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1%. Activity was limited with the region's largest markets - China, Hong Kong and Australia - closed for a holiday.

Globally, equity markets were basking in the prospects of a broadening economic recovery from the coronavirus pandemic and anticipation of continuity in dovish monetary policy from the US Federal Reserve.

The MSCI all-country world equity index, the US S&P 500 and the pan-regional STOXX Europe 600 index all closed at record highs on Friday.

The rally came even as US inflation data on Thursday exceeded market expectations.

"One big factor is that the Fed has been saying inflation will be transitory and that it will maintain loose monetary policy," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "But another factor to consider is that markets are simply awash with cash."

Ample funds are finding their way to bonds, where the yield on 10-year US Treasuries stood at 1.465% ahead of the Fed's policy meeting this week, having fallen to a three-month low of 1.428% on Friday.

"It is becoming painful for bond bears and I bet the 10-year yield will fall to 1.25% or even 1%," said Akira Takei, fund manager at Asset Management One, noting that US economic recovery is likely to slow in coming months.

"The US employment rate was 61% before the pandemic. It has recovered to 58% but I expect its recovery to slow. After the great financial crisis (of 2008), it has never recovered to its pre-crisis levels."

Speculators are also building up long positions in US debt, with their net long positions in US bond futures hitting the highest level since October 2017, US financial watchdog data showed.

Many investors expect the Fed to repeat its dovish view at its two-day meeting from Tuesday. While some Fed board members have said the bank should start discussing tapering its bond buying, most investors think a majority of policymakers still prefer to wait a bit more.

"There will probably be no surprise from the Fed this week," said Mitsubishi UFJ's Fujito. "But in the longer term, there's clear risk of the Fed's stimulus becoming excessive. There is little justification for buying mortgage bonds when housing markets are becoming so hot."

In the currency market, the euro has lost steam after the European Central Bank last week showed no willingness to reduce its stimulus either.

The euro traded at $1.2111, having fallen to a one-month low of $1.2093 on Friday.

The yen stood little changed at 109.70 yen.

The British pound changed hands at $1.4113, near the lower end of its trading range over the past month, ahead of British Prime Minister Boris Johnson's announcement on Monday on whether its planned lifting of coronavirus restrictions can go ahead as scheduled on June 21.

Hopes of ending the curbs hung in the balance as data showed a further rise in cases of the rapidly spreading Delta variant, which was identified first in India.

British tabloid The Sun on Friday reported Johnson is set to delay lockdown lifting to July 19.

Meantime, oil prices held near multi-year highs on an improved outlook for worldwide fuel demand.

Brent crude futures inched up 0.2% to $72.85 per barrel, near their highest levels since May 2019.

US West Texas Intermediate (WTI) crude futures added 0.2% to $71.05 per barrel, near their highest since October 2018.