Asian and European markets boosted by growing optimism about recovery | Money
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HONG KONG, May 28 – Asian and European markets mostly rose today to end a broadly bullish week, with traders welcoming another better-than-expected reading on US jobless claims which has strengthened optimism about the recovery in the world’s largest economy.
Reports that President Joe Biden was planning a US $ 6 trillion (RM 24 trillion) budget proposal for later today, which includes his extensive infrastructure contract and spending on families, has also been reported. encouraged.
And while the huge spending is likely to add to inflationary pressures, investors were more than happy to look beyond that, preferring to focus on economic stimulus, while Federal Reserve officials as well as the Treasury Secretary Janet Yellen continue to argue that any price hikes will be transient.
Regional stocks had a broadly positive week as inflation fears and rising virus cases take a back seat to the reflation narrative fueled by the rollout of vaccines and reopening of economies.
And on Thursday, the Labor Department said 406,000 new seasonally adjusted unemployment benefit claims were filed last week, 38,000 fewer than the week before, much better than expected and a weak pandemic.
U.S. media also reported that Biden would unveil his big spending plan to give the economy an extra boost, even as he is enjoying one of his best growth years in decades.
After passing his $ 1.9 trillion stimulus soon after taking office this year, the president now has road and bridge madness in the pipeline, which he aims to reconcile with Republicans.
Oil squeezes higher
Hopes for a deal were boosted when the Republicans raised their bid to $ 928 billion, after Biden lowered his to $ 1.7 trillion. He also wants to push through a plan for American families worth $ 1.8 trillion.
“Of course, what the president would like and what he gets from Congress could be very different, but with this level of spending, Asia seems to feel that part of that bag of goodies will fall in its way.” said Jeffrey Halley of OANDA.
After a positive end for the Dow and the S&P 500 in New York, Asia continued its recent advances. Tokyo jumped more than 2%, thanks to the weaker yen, while Sydney and Taipei climbed more than 1% each.
Singapore, Seoul, Manila, Mumbai, Bangkok and Jakarta were also up while Hong Kong was flat, and Shanghai and Wellington plunged.
Paris opened a little higher, despite data showing the French economy contracted in the first three months of the year, reversing a previous estimate that it had grown.
London and Frankfurt have also increased.
Oil prices maintained Thursday’s strong gains, with WTI benefiting from further buying after its highest close since October 2018, fueled by bets that the global recovery will boost demand for black gold, while traders also considered the start of the next driving season in the United States. next month.
Brent was also struggling to get back above US $ 70 a barrel, helped by allaying fears that any eventual Iranian nuclear deal will lead to fresh supply madness in the global market.
“The momentum is there,” said Howie Lee of Oversea-Chinese Banking Corp., adding that dealers believe the market “will be able to absorb any oversupply.”
Key figures around 08:10 GMT
Tokyo – Nikkei 225: + 2.1% to 29,149.41 (closing)
Hong Kong – Hang Seng Index: FLAT at 29,124.41 (closed)
Shanghai – Composite: DOWN 0.2 percent to 3600.78 (close)
London – FTSE 100: + 0.2% at 7,032.84
Dollar / yen: UP at 109.90 from 109.83 yen at 2050 GMT
Pound / dollar: DOWN to US $ 1.4184 from US $ 1.4204
Euro / dollar: DOWN to US $ 1.2185 from US $ 1.2198
Euro / pound: UP to 85.91 from 85.84 pence
West Texas Intermediate: FLAT at US $ 66.84 per barrel
North Sea Brent: Down 0.1% to US $ 69.40 per barrel
New York – Dow: + 0.4% to 34,464.64 (closing) – AFP