Stock markets posted mixed results, dollar fell and oil stabilized on Tuesday; Bitcoin has come this close to $ 50,000 for the first time as investors reacted to US incentives and Covid vaccine developments.
Asia’s main stock indexes saw Tokyo’s highest in 30 years, while Europe was largely stable halfway.
Wall Street ended overnight at new highs, but the dollar hit a three-month low against the British pound on Tuesday.
As stocks benefit from strong economic recovery prospects, optimism is mitigated by delays in the massive US stimulus scheme.
President Joe Biden’s $ 1.9 trillion rescue bill is seen as an addition to global inflation concerns that have begun to flare up in anticipation of rising oil prices and large post-lockout consumer spending.
The inflation outlook contributes to the dollar’s weakness while helping gold, a traditional store of value.
“Given all this optimism, the real elephant in the room cannot help with what will happen if oil prices continue to rise at their current rates,” said Michael Hewson, chief market analyst at CMC Markets UK.
The benchmark crude oil contract Brent North Sea held its 13-month high above $ 60 on Tuesday thanks to rising demand expectations as the economies reopened.
“The fundamentals of oil seem strong again, on both the supply and demand side,” said Edward Moya, analyst at the Oanda trading group.
“There is high optimism that vaccination practices will return to normal in important parts of the global economy, despite demand decreasing by nearly five million barrels a year.”
Meanwhile, Bitcoin broke a new record of $ 48,215.83 on Monday after earning a massive surge from news that Elon Musk’s electric car maker Tesla invested $ 1.5 billion in cryptocurrency.
Axi strategist Stephen Innes said that overall market sentiment was also reinforced by “a series of optimistic gains from the holiday season and vaccine optimism.”
The vaccination drive “provides the ultimate rescue safety net that will allow people to participate in all pre-covid activities such as the simple pleasures of going to a movie or eating out,” he added.
In another sign of optimistic times, the Japanese automaker Nissan, affected by the crisis, raised its all-year forecast for the second quarter as the global auto industry showed signs of recovery from the coronavirus outbreak.