GLOBAL MARKETS-Stocks hit record highs on strong economic data

By Ritvik Carvalho
LONDON, April 6 (Reuters) - World stocks hit record highs on
Tuesday, supported by strong economic data from China and the
United States, while currency and bond markets paused for breath
after a month of rapid gains in the dollar and Treasury yields.
Equities as measured by the 49-country spanning MSCI All
Country World Index .MIWD00000PUS hit an all-time high as
European stocks played catch-up with gains in Asia and Wall
Street overnight in their first trading session since the Easter
holiday.
The pan-European STOXX 600 index hit a record high after the
open in Europe. .EU
Profit-taking pushed Japan's Nikkei .N225 down 1% and
dragged on the Shanghai Composite .SSEC .
The S&P 500 .SPX closed Monday at a record peak and
futures ESc1 dipped 0.2% on Tuesday. .N
On the heels of a bumper U.S. jobs report on Friday, March
data showed services activity hit a record high. China's service
sector has also gathered steam with the sharpest increase in
sales in three months. "We think investors should not fear entering the market at
all-time highs," said Mark Haefele, Chief Investment Officer,
UBS Global Wealth Management.
"We recommend continuing to position for the reflation trade
as the economic recovery gathers pace - data released Friday
showed U.S. nonfarm payrolls surged by 916,000 in March, the
biggest gain since August. "
The yield on benchmark 10-year U.S. Treasuries US10YT=RR
fell to 1.7093%, while the U.S. dollar has mostly missed out on
a big bounce from the strong data and held at $1.1819 per euro a
day after posting its steepest drop since mid-March.
Elsewhere, Swiss lender Credit Suisse sought to draw a line
under its exposure to the implosion of hedge fund Archegos
Capital, announcing the debacle would cost it about $4.7 billion
and two senior executives their jobs. STATE
The steadying Treasury yields and dollar follow a charge
higher over the first quarter, with an 83 basis point rise in
10-year yields, the biggest quarterly gain in a dozen years, and
a 3.6% rise in the dollar index - the sharpest since 2018.
"Bonds have settled down now," said Omkar Joshi, portfolio
manager at Opal Capital Management in Sydney, after a hard and
fast selloff. "I think markets can keep powering on from here."
Minutes from the March meeting of the U.S. Federal Reserve,
due on Wednesday, are the next focus for bond markets, although
they will not address the most recent data surprises and markets
have run far ahead of Fed projections for years of low rates.
Fed funds futures 0#FF: have priced in a hike next year
while eurodollar markets have it priced by December 0#ED: .
"What needs to be tested is how the Fed reinforces and
reassures on its flexible average inflation target policy," said
Vishnu Varathan, head economist at Mizuho Bank in Singapore.
"The dollar's past few weeks of movement reflect markets
moving ahead despite what the Fed has said."
Currencies were fairly quiet through the Asia session, and
hung on to small gains on the dollar. The Australian dollar
AUD=D3 traded at $0.7647 after the central bank held policy
settings steady, as expected. The yen JPY= was a fraction softer at 110.21 per dollar,
while sterling GBP= touched a two-and-a-half week high of
$1.3919. FRX/
The dollar's wobble helped oil prices recoup some losses
suffered on Monday on worries a new wave of COVID-19 infections
in Europe and India could curtail energy demand. O/R
Brent crude futures LCOc1 rose 1.4% to $62.98 a barrel
while U.S. crude CLc1 climbed 1.5% to $59.56 a barrel. Gold
XAU= tacked on 0.2% to $1,732 an ounce. GOL/

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Emerging markets http://tmsnrt.rs/2ihRugV
Global asset performance http://tmsnrt.rs/2yaDPgn
Credit Suisse troubles https://tmsnrt.rs/3cSklUJ
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