GLOBAL MARKETS-Stocks rise, bonds sell off as the 'reflation' trade gathers pace

* Cyclicals rise as Wall St scales new peak
* Bitcoin breaks above $50,000
* Government bond yields leap
* Oil prices close to 13-month highs, supported by Texas
cold snap

(Updates with midday U.S. markets activity; changes byline,
dateline, previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Feb 16 (Reuters) - Wall Street joined a global
march propelling stock indexes to record highs on Tuesday, with
investors selling government bonds in a bet that COVID-19
vaccinations and U.S. stimulus will deliver a durable economic
recovery after a year of lockdowns.
Bitcoin BTC=BTSP added to the bullish mood, climbing above
$50,000 for the first time, while prospects of "reflation" - a
boost in inflation from extraordinary fiscal stimulus - pushed
U.S. Treasury yields higher.
U.S. President Joe Biden will travel to Wisconsin on Tuesday
to press his case for a $1.9 trillion pandemic relief bill in
the political battleground state that helped secure his victory
in last year's presidential election. The MSCI's global stock index .MIWD00000PUS was up 0.11%
at 685.81 after hitting a record high of 687.26 earlier in the
session. A positive close would mark the 12th consecutive day of
gains for the first time since January 2004.
Wall Street's main indexes opened at all-time highs, with
investors piling into economically sensitive stocks on hopes of
more fiscal aid to lift the world's biggest economy from its
coronavirus-driven slump.
"I think it's a global reflation trade very much in play,
that risk-on positive investor sentiment is still very much with
us," said Derek Halpenny, head of research for global markets at
MUFG.
The Dow Jones Industrial Average .DJI rose 64.4 points, or
0.2%, to 31,522.8, the S&P 500 .SPX gained 2.87 points, or
0.07%, to 3,937.7 and the Nasdaq Composite .IXIC added 9.34
points, or 0.07%, to 14,104.81.
The S&P value index .IVX , which includes bank, energy and
industrial sectors, has risen more than 6% in the past two
weeks, slightly outperforming the growth index .IGX , which is
skewed more toward technology. The pan-European STOXX 600 index .STOXX was 0.09% lower,
but still hovering near the near-one-year high hit earlier in
the session, as investors bet a bumper U.S. stimulus package
will power global economic growth this year. U.S. 10-year Treasury yields raced above 1.26% for the first
time since last March as expectations of extended fiscal and
monetary stimulus alongside hopes of an economic upswing gave
the reflation trade another leg higher. "The market has fully embraced the prospects of Biden's $1.9
trillion stimulus, and the accelerated vaccine rollout is
support of further bearish price action as well," Westpac
strategists told clients.
Bond yield curves - considered a reliable barometer of
growth expectations - have also steepened, with the gap between
two-year and 10-year U.S. notes now around 114 bps, the widest
since April 2017 US2US10=TWEB .
The U.S. dollar index =USD was 0.17% higher, lingering
close to the three-week low hit earlier in the session.
Bitcoin BTC=BTSP soared above $50,000 to an all-time high,
adding steam to a rally fueled by signs that the world's biggest
cryptocurrency is gaining acceptance among mainstream investors
and companies. Oil prices hovered near 13-month highs, supported by a cold
snap that shut wells in Texas, the biggest U.S. producing state,
although gains were capped by a wage deal in Norway that averted
supply disruptions in Europe. Brent crude LCOc1 was trading at $63.15 a barrel, off
0.24%, after rising to its highest since January 2020 in the
previous session. U.S. West Texas Intermediate (WTI) crude
CLc1 futures gained 0.72%, to $59.9 a barrel.
Spot gold XAU= was down 0.45% at $1,810.31 an ounce.
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World FX rates YTD http://tmsnrt.rs/2egbfVh
Global asset performance http://tmsnrt.rs/2yaDPgn
Bitcoin crosses $50K https://tmsnrt.rs/2N3uDaA
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