Asian shares hovered near 1-1/2 week highs on Monday helped by expectations monetary policy will remain accommodative the world over, while COVID-19 vaccine rollouts help ease fears of another dangerous wave of coronavirus infections.
MSCI’s broadest index of Asia-Pacific shares outside Japan was last at 695.59, within striking distance of Friday’s high of 696.48 – a level not seen since Apr. 7.
The index jumped 1.2% last week and is up 5% so far this year, on track for its third straight yearly gain.
“The extremely supportive monetary and fiscal policy setting continues to provide a fertile environment for risk assets,” said Rodrigo Catril, senior forex strategist at National Australia Bank.
Australian shares were 0.25% higher while New Zealand’s benchmark index and South Korea’s KOSPI added 0.4% each. Japan’s Nikkei eased 0.4%.
On Friday, the S&P 500 gained 0.4% to close at a new record high while clocking its sixth straight weekly gain. The Dow finished 0.5%, also at a record high while the Nasdaq climbed 0.1%.
E-mini futures for the S&P 500 were down 0.3% in early Asian trading.
This week is off to a quiet start with no major data releases slated on Monday.
Investors will keep their eyes peeled for earnings from IBM and Coca-Cola later in the day. Netflix reports on Tuesday while later in the week American Airlines and Southwest will be the first major post-COVID cyclicals to post results.
The European Central Bank (ECB) meets on Thursday with no changes to rates or guidance expected while preliminary data on factory activity around the globe for April is due on Friday.
Elsewhere, Bitcoin, the world’s biggest cryptocurrency, recouped most of its losses after plunging as much as 14% on Sunday following speculation the U.S. Treasury may be looking at cracking down on money-laundering activity within digital assets, NAB’s Catril said.
Data website CoinMarketCap cited a blackout in China’s Xinjiang region, which reportedly powers a lot of bitcoin mining, for the selloff.
The retreat in Bitcoin also comes after Turkey’s central bank banned the use of cryptocurrencies for purchases on Friday.
Bitcoin is up more than 90% year to date, driven by its mainstream acceptance as an investment and a means of payment, accompanied by the rush of retail cash into stocks, exchange-traded funds and other risky assets.
In currencies, the U.S. dollar loitered near a four-week low against a basket of currencies as investors increasingly bought into the Federal Reserve’s insistence it would keep an accommodative policy stance for a while longer.
The dollar index measuring the greenback against a basket of six currencies was unchanged at 91.612, not far from its lowest since March 18 touched on Friday.
Against the Japanese yen, the greenback was off a touch at 108.72. The euro was a tad lower at $1.1966 while the British pound eased 0.07% to $1.3820. [FRX/]
The risk-sensitive Aussie dollar slipped for a second straight day to be down 0.2% at $0.7715.
In commodities, oil prices were down with the Brent slipping 34 cents to $66.43 a barrel and U.S. crude falling 29 cents to $62.84.
Gold was up 0.2% at $1,779.3 an ounce.
Editing by Michael Perry