SYDNEY- Stocks started a busy week with guarded gains as investors gauged the chance of added US fiscal and monetary stimulus, while the British pound rose in relief as a last-gasp extension to Brexit talks dodged a hard divorce.
Progress on coronavirus vaccines cheered risk sentiment, with the first shipments speeding across the United States as part of an historic mission to inoculate more than 100 million people by the end of March.
“The vaccine has and will likely continue to provide a tailwind to the market that is allowing investors to look beyond record case levels, hospitalizations, and deaths,” said analysts at JPMorgan in a note.
E-Mini futures for the S&P 500 responded by rising 0.5 percent, while March Treasury bond futures slipped 4 ticks. EUROSTOXX 50 futures added 0.6 percent and FTSE futures 0.3 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japa edged up 0.1 percent, having hit a string of record highs last week.
Japan’s Nikkei added 0.6 percent as a survey showed the mood among hard-hit Japanese businesses had improved in the December quarter.
An added hurdle for the dollar will be the Federal Reserve’s policy meeting on Dec. 15-16.
The market is assuming the central bank will merely refine its forward guidance on policy rather than buying more bonds or “twisting” its portfolio to add more longer-dated debt.
“The risk is then if the Fed does unveil a surprise twist at this meeting, then Treasuries could rally and the USD could fall,” said Tapas Strickland, a director of economics at NAB.