COVID-19 Update: Global Stocks Up As Vaccine Shields Against Second-Wave Worries
Stocks gained on Wednesday and bonds dropped as the news of a working COVID-19 vaccine seemed to inoculate investors against second wave worries.
In the latest COVID-19 update, bonds dropped and stocks gained on Wednesday as the news of a working COVID-19 vaccine seemed to inoculate investors against surging infections. New Zealand bonds crumble as traders re-priced negative rates, lifting the 10-year yield by 14.5 basis points to 0.898%. This is noted as the steepest one-day rise since panic selling in March. On the other hand, MSCI’s broadest index of Asia-Pacific shares outside Japan rose to 0.4% while Japan’s Nikkei rose to 1.8%. However, most of the action was between stocks.
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Global Stocks Up As Vaccine Shields Against Second-Wave Worries
Banks made additions to the Tuesday gains along with energy and travel stocks. On the contrary, tech companies stocks fell even with the moderated pace from Tuesday. According to a report, oil futures sat by two-month highs on a sharp draw-down in supplies and anticipation of better demand. The currency markets were steady for kiwi that climbed half a per cent to a 19-month high after the Reserve Bank of New Zealand kept their rates on hold.
However, other majors and fixed income markets were mostly flat. Traders were unwilling to extend a selloff in the assets of bonds and the yen while a trying northern winter looms. According to a news portal, the equity rotation came with a vast bond selloff after the announcement by Pfizer that its COVID-19 vaccine candidate, developed with BioNTech showed 90% success rate in preventing infection during trials.
The report also suggests that the US bond market was shut for veterans day. However, the yield on benchmark 10-year Treasuries posted its highest close on Tuesday at 0.9720 since March. Duncan Tan, rates strategist at DBS in Singapore said that because of better trade and growth prospects, a yield of compression between the low yielders and high yielders will be seen. As per the report, Brent crude futures were last 41 cents firmer at $44.02 a barrel. This was just below a two-month high earlier in the session. US crude futures also rose 42 cents to $41.79 a barrel. However, Gold was steady at $1,881 an ounce.
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