World Equities rally on pandemic recovery, US stimulus optimism
Australia has spent twice as much as the UK on Covid-19 stimulus
Staggering figures have revealed that Australia has spent twice as much supporting citizens through the coronavirus pandemic than countries like the UK, Canada, France, Italy and New Zealand.The stimulus spent by the Morrison Government is 86 times larger than that of the British government, despite the UK experiencing around 46 times more coronavirus cases per capita, reported News.com.au.
Equities pushed higher Tuesday fuelled by the overarching theme of vaccine rollouts, slowing infections and the easing of lockdowns, as well as optimism President Joe Biden will be able to soon sign off on a vast US stimulus package.
Oil also held on to gains around 13-month highs as a severe cold snap in Texas combined with expectations of a surge in demand in line with the reopening of economies.
With Britain and the United States leading the way in rolling out vaccines at the same time as they see a sharp slowdown in new cases and deaths, there are growing calls for governments to lift strict containment measures and get life back to a semblance of normal.
Yellen Expects U.S. to Reach Full Employment Next Year if Biden's Stimulus Plan Passes
The Treasury Secretary said not passing a relief bill poses a bigger risk than the chance of rising inflation."I would expect that if this package is passed, we would get back to full employment next year," she said to host Jake Tapper on CNN's State of the Union on Sunday.
The United States on Sunday reported its lowest daily infection number since October, while Britain easily hit a key target for immunising highest-risk people, while the European Union -- which is struggling with its vaccine programme -- has ramped up plans to deliver more jabs.
"Rapid vaccine uptake means consensus is aligned to a surge in economic activity and strong profit recovery," said Axi strategist Stephen Innes.
He added that with the Federal Reserve's ultra-loose monetary policies and Biden's stimulus on the way, "it certainly feels like the path of least resistance remains higher, as calls grow more vocal for an increase in the pace of reopening and the positive implications that would have for some areas of the market".
Global stocks rise as investors bet on a swift push by Democrats to pass Biden's stimulus plan
Global stocks gained on Wednesday as investors focused on Democratic efforts to agree on US stimulus. The "'buy everything' trade still has the upper hand and FOMO hasn't gone," a market analyst said.Aiming to get the plan to a floor vote by the end of February, Democrats on Tuesday released draft legislation to maintain the income limit for stimulus checks at $US75,000 for individual taxpayers and $US150,000 for married couples.
While Biden's spending package is widely expected to pass through the Democrat-controlled Congress, analysts have warned it might not be as big as the $1.9. trillion he proposed, though it is still expected to be north of a trillion.
- Texas cold snap -
Hong Kong rose more than one percent as traders returned from an extended holiday weekend, while Tokyo was also more than one percent higher a day after breaking 30,000 points for the first time in three decades.
Wellington put on more than one percent after New Zealand's government said there had been no reports of community transmission of the virus in Auckland, with the city in lockdown following the discovery of the UK strain.
Sydney, Seoul, Singapore, Manila and Jakarta were also higher. Shanghai and Taipei were closed for holidays.
David Kelly at JP Morgan Asset Management said in a note: "A combination of a receding pandemic and extra fiscal stimulus should lead to a very rapid acceleration in economic activity over the course of 2021.
As Yellen prepares for G7 talks, leaders look for US cooperation
US Treasury Secretary Janet Yellen will join her G7 peers to discuss the global economic recovery from the pandemic.US Treasury Secretary Janet Yellen will join Friday’s online gathering with her Group of Seven (G7) peers. During the meeting, they are likely to renew promises to pursue huge stimulus programmes to aid the economic recovery from COVID-19.
"The most important unknown is the extent to which a rapid recovery, fuelled by significant and broad fiscal stimulus, could boost inflation via temporary excess demand for labour, goods and services."
But he said that while inflation will likely jump, "the Fed has made it clear that they do not intend to raise short-term interest rates until the economy has achieved 'maximum employment'".
Oil prices edged higher thanks to bets on a surge in demand as the world reopens, with WTI holding above $60 as Texas suffers freezing temperatures that have hit production, transport and power.
"Global supply is getting tighter with the US cold snap here to stay for now, and there are also expectations for demand to improve," said Will Sungchil Yun, at VI Investment Corp, adding it " doesn't look impossible" for WTI to hit $65.
On currency markets, the pound rose to a near three-year high close to $1.40 as Britain's vaccine programme speeds along.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: UP 1.6 percent to 30,564.19 (break)
Hong Kong - Hang Seng: UP 1.3 percent to 30,551.10
Shanghai - Composite: Closed for a holiday
Pound/dollar: UP at $1.3942 from $1.3912
Euro/dollar: UP at $1.2142 from $1.2132
Euro/pound: DOWN at 87.09 pence from 87.20 pence
Dollar/yen: UP at 105.55 yen from 105.35 yen
Brent North Sea crude: UP 0.4 percent at $63.54 per barrel
West Texas Intermediate: UP 1.2 percent at $60.20 per barrel
London - FTSE 100: UP 2.5 percent at 6,756.11 (close)
New York - Dow: Closed for a holiday
US retail sales climb the most since June as stimulus boost ends losing streak .
US retail sales grew 5.3% in January, the Census Bureau announced Wednesday. The reading beats the 1% economist estimate and snaps a three-month losing streak. Sales are a popular gauge of consumer spending, a critical driver of overall growth. Visit the Business section of Insider for more stories. American spending at retailers rebounded last month as falling COVID-19 cases and new stimulus revived some economic activity. US retail sales grew 5.3% in January, the Census Bureau said Wednesday. Economists surveyed by Bloomberg expected spending to climb by 1%.