{"id":104201,"date":"2021-01-07T10:48:18","date_gmt":"2021-01-07T10:48:18","guid":{"rendered":"https:\/\/fin2me.com\/?p=104201"},"modified":"2021-01-07T10:48:18","modified_gmt":"2021-01-07T10:48:18","slug":"stocks-climb-bonds-fall-after-democrats-win-senate","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/stocks-climb-bonds-fall-after-democrats-win-senate\/","title":{"rendered":"Stocks climb, bonds fall after Democrats win Senate"},"content":{"rendered":"
LONDON\/SINGAPORE (Reuters) – Bonds licked their wounds and stocks rose on Thursday as investors bet Democrat control of the U.S. Congress would enable President-elect Joe Biden to borrow and spend heavily, with a bruised dollar hovering near its lowest in almost three years.<\/p> U.S. Treasuries extended their steepest selloff in months after Democrat victories in two Georgia races handed them narrow control of the Senate, bolstering President-elect Joe Biden\u2019s power to pass his agenda.<\/p>\n Europe\u2019s Euro STOXX 600 gained 0.3%, with indexes in Frankfurt and Paris up 0.4% and 0.6% respectively. Growth-linked sectors from energy to miners rallied on the prospects of more U.S. stimulus.<\/p>\n The MSCI world equity index, which tracks shares in almost 50 countries, rose 0.3%.<\/p>\n Earlier, MSCI\u2019s broadest index of Asia-Pacific shares outside Japan rose 0.6% and Japan\u2019s Nikkei hit its highest since 1990.<\/p>\n Even after risk sentiment was earlier knocked by images of President Donald Trump\u2019s supporters storming Capitol Hill to attempt to overturn his election defeat, S&P 500 futures rose 0.6% as order was restored and Congress returned to work.<\/p>\n It quickly became clear that objections from pro-Trump Republican lawmakers to Biden\u2019s victory in battleground states would be rejected overwhelmingly, including by most Republicans.<\/p>\n \u201cFor stocks it will be a net positive, for other assets classes it will be different,\u201d said Olivier Marciot, a portfolio manager at Unigestion said of the Democrat victory.<\/p>\n \u201cThe bond moves yesterday were something we hadn\u2019t seen for a long time. The case is for reflation.\u201d<\/p>\n Wednesday\u2019s bond selloff pushed the yield on benchmark 10-year U.S. Treasuries, which rises when prices fall, over 1% for the first time since March. It rose as high as 1.0660% on Thursday. [US\/]<\/p>\n Euro zone government bond yields also edged higher, with Germany\u2019s 10-year Bund yield up slightly to -0.55%. Japanese government bond prices had also slipped, taking cues from the U.S.<\/p>\n The ramifications of the Democrat victory played out in currency markets, too.<\/p>\n The dollar had sunk on the Georgia results to a near-three year low against a basket of six major currencies, with traders betting growing U.S. trade and budget deficits would weigh on the greenback. On Thursday it bounced 0.3% to 89.529.<\/p>\n Against the euro it hovered near an almost three-year low of $1.2349, and also languished near recent multi-year troughs against the Aussie, kiwi and Swiss franc.<\/p>\n Still, some analysts said rising bond yields may help the dollar\u2019s fortunes.<\/p>\n \u201cHigher Treasury yields should benefit the dollar against the euro and the yen,\u201d said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.<\/p>\n \u201cHowever, the dollar will remain weaker against commodity currencies like the Aussie and emerging market currencies.\u201d<\/p>\n Other risk-on assets climbed.<\/p>\n Copper, a barometer for global growth, gained 0.3% to hover near an 8-year high.<\/p>\n In Asia, miners Rio Tinto and BHP earlier surged to all-time peaks, while chipmakers Samsung and SK Hynix drove South Korean stocks to a record high.<\/p>\n Oil prices held around a 10-month high, basking in the afterglow of a production cut promised by Saudi Arabia. Brent crude futures were last up 0.7% to $54.68 a barrel.<\/p>\n Gold was steady at $1,921 an ounce, and bitcoin firm after hitting a fresh record high of $37,800. The cryptocurrency has soared over a quarter already this month after almost quadrupling last year.<\/p>\nBRUISED DOLLAR<\/h2>\n