Shares, gold and bitcoin rise as dollar softens

Milan/Tokyo — Global shares rose and the dollar softened on Monday after US President Donald Trump signed a $2.3-trillion spending package and as investors continued to celebrate a last-minute trade deal clinched between Britain and the EU.

By backing down from his earlier threat to block the bipartisan bill, Trump allowed millions of Americans to continue receiving unemployment benefits and averted a federal government shutdown.

“As the coronavirus pandemic has shown little sign of abating, the emergency aid was needed to avoid a sharp slowdown in the economy during the first quarter,” said Nobuhiko Kuramochi, market strategist at Mizuho Securities. “It would have been unsettling if we hadn’t had it by the end of year.” 

The MSCI world index, which tracks shares in 49 nations, rose 0.3% by 9.07am GMT, boosted by strong opening gains in Europe and a positive session in Asia overnight, though trading was thinner due to the festive period.

The EuroStoxx index rose 0.9% in the first trading session after London and Brussels signed an 11th-hour deal on Thursday evening that preserves zero tariff access to each other’s markets.

The British market was closed for the Boxing Day holiday.

“We can finally move on from the Brexit drama,” said Win Thin, global head of currency strategy at Brown Brothers Harriman. “After the last-minute deal was struck last week, the UK parliament will vote on the deal on Wednesday. With (opposition party) Labour promising its support, it should pass handily.” 

US S&P futures rose 0.6% in their first trade after the Christmas holiday, edging near a record touched last week.

Earlier Japan’s Nikkei advanced 0.7% and China stocks also rose, helped by strong industrial profit data. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1%.

The rollouts of Covid-19 vaccines were also bolstering hopes of more economic normalisation next year, with Europe launching a mass vaccination drive on Sunday. That for now has offset alarm over a variant of the virus that has been raging in England and was confirmed in many other countries, including Japan, France and Canada, over the weekend.

In foreign exchange markets, the dollar index fell 0.2% to 90.028. The dollar is expected to stay under pressure as investors bet on continued recovery in the global economy and a prolonged period of loose US monetary policy.

The euro was up 0.2% at $1.2232, a tad below its 2-1/2-year high of $1.22735, while the yen changed hands at 103.41 per dollar.

The British pound remained just below the 2½-year high of $1.3625 hit earlier this month in anticipation of the EU-UK trade deal. It last changed hands at $1.3559, up 0.1%.

Precious metals were livelier as gold rose 1.3% at one point to a one-week high as investors welcomed Trump’s signing of the pandemic aid bill, with a weaker dollar lending further support.

Gold was last up 0.4% at $1,883.5 an ounce and silver gained about 1.8%.

Oil prices rose, with Brent crude futures up 0.7% at $51.67 a barrel and US crude futures up 0.8%.

In bond markets, 10-year US Treasuries yields rose to 0.9514% and 10-year German bund yields inched lower to -0.550%.

Bitcoin, which hit a high over the weekend, was up 2.2% at $26,876, bringing the total value of the cryptocurrency in circulation to over $500bn.

Reuters