The dollar slipped and a gauge of global stocks edged toward a record Monday as the rollout of vaccines and stimulus support eased concerns about the escalating pandemic. Gold and Treasury yields climbed.

Shares jumped in South Korea and Australia, but underperformed in Japan after Prime Minister Yoshihide Suga said he’s considering declaring a state of emergency for the Tokyo area to stem a surge in virus infections. S&P 500 futures and European contracts posted modest gains. The U.S. benchmark closed at an all-time high on Dec. 31. Gold climbed more than 1% to the highest level in almost two months.

The dollar fell against all its Group-of-10 peers amid optimism about a global growth recovery. The offshore yuan strengthened to the highest since mid-2018. Equity indexes in China and Hong Kong advanced, shrugging off the New York Stock Exchange’s move to delist China’s three biggest telecommunication companies.

Overnight News:

  • This will become another step forward in the global response to the pandemic, hopefully shortening the time before some form of herd immunity can be achieved and economies across the globe can reopen.
  • At the same time, British Prime Minister Boris Johnson warned that he may have to impose tighter restrictions as Covid-19 cases soar in his country, while Germany is likely to extend its national restrictions beyond Jan. 10 to curb infection rates that are still running high.
  • It’s not only in Europe where coronavirus problems exist. Cases remain very high in the U.S., and in Japan Prime Minister Yoshihide Suga confirmed the government was considering a state of emergency for Tokyo and three surrounding prefectures.
  • Still, there was some good news Monday, as the Caixin/Markit manufacturing Purchasing Managers’ Index for December came in at 53.0. Although below November’s 54.9, this reading indicated the Chinese manufacturing sector is still expanding.
  • The equivalent December manufacturing PMI data for the European countries are due later Monday, and are expected to show growth here as well.

Today's Economic Calendar:

Chart of the day:

Posted on

January 4, 2021


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