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GLOBAL MARKETS-Stocks rise, bond yields too - despite central banker talk-down efforts

Published 26/02/2021, 12:09 am
© Reuters
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* Stocks rise on economic optimism, soothing central banks

* Yield on 10-year Treasury jumps to one-year high

* Oil eyeing $70 per barrel, copper near decade peak

* Dow hits record high, big tech still losers

* GameStop (NYSE:GME) more than doubles in price in trading frenzy

* Reuters Live Markets blog: LIVE/

* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates http://tmsnrt.rs/2egbfVh

By Marc Jones

LONDON, Feb 25 (Reuters) - World stocks clawed back towards record highs on their third day of gains on Thursday as the dollar dropped to a three-year low, after top Federal Reserve and European Central Bank officials attempted to talk down rising bond market yields.

There was a lot to keep tabs on. A renewed retail frenzy re-ignited the likes of GameStop bets on $70 a barrel oil and a near decade-high in copper prices rallied commodity currencies /FRX - and despite all the central bank talk, bond yields were still rising. GVD/EUR

MSCI's world equities index, which spans 50 countries .MIWD00000PUS , was up 0.45% after gains in Asia and a decent morning in Europe where oil and gas stocks enjoyed a 2% jump, but things were starting to turn bumpy. .EU .N

Nasdaq futures were down 1% on Wall Street. The index has dropped for seven out of the last eight days as investors have moved out the super-charged tech and internet stocks that surged when COVID-19 forced people to stay at home.

Apple AAPL.O , Amazon AMZN.O , Microsoft MSFT.O , Facebook FB.O and Netflix NFLX.O were all down between 0.9% and 1.3% before the bell.

"There are two clear stories now" said CMC Markets senior analyst Michael Hewson. "You have the concerns about rising yields, and they are continuing to move higher today, and then you have got an economic recovery story, which is helping lift the more moderately-valued parts of the market."

Federal Reserve Chair Jerome Powell said on Wednesday that U.S. rates could remain low for years and ECB board member Isabel Schnabel said on Thursday the bank would fight any big increases in inflation-adjusted market rates. too-abrupt increase in real interest rates on the back of improving global growth prospects could jeopardise the economic recovery," she said. "Therefore, we are monitoring financial market developments closely."

But bond markets were not playing ball. Benchmark Germany Bund yields climbed 4 basis points and U.S. 10-year Treasury yields hit 1.45% US10YT=RR and their way to their biggest monthly rise since Donald Trump's U.S. election victory in late 2016.

Focus will be on the Labor Department's weekly jobless claims report, which is expected to show fewer Americans filed new claims for unemployment benefits last week.

In the FX markets, the safe-haven U.S. dollar index USD= slumped to a three-year low as the Fed's stance, ongoing progress with COVID vaccination programmes and commodity market uplift boosted riskier currencies instead. /FRX

The Australian and Canadian dollars both hit three-year highs of $0.7980 AUD=D4 and C$1.2477 CAD=D4 per U.S. dollar respectively.

The euro touched a six-week high of $1.2235 EUR= too, whereas the safe-haven yen and Swiss franc both weakened JPY= .

"It is pretty clear that there is a strong concentration in the commodity currencies," said Saxo Bank's John Hardy. "Even with emerging markets you are seeing it to a degree," he added, pointing to how big energy importers like Turkey's lira had faded.

MARATHON NOT A SPRINT

Brent oil climbed to a 13-month high of $67.30 LCOc1 CLc1 of after U.S. government data on Wednesday showed a drop in crude output as a deep freeze in Texas disrupted production last week. O/R

Copper prices CMCU3 moved to over $9,500 a tonne in London. The key industrial metal now at its highest level in almost a decade and could log its biggest monthly gains in 15 years this month. a possible sign of a renewed retail-driven frenzy in equity markets, GameStop's GME.N Frankfurt-listed shares GMEa.F GME.N trebled as they opened on Thursday, overshooting the videogame retailer's 100% surge on Wall Street overnight.

Other so-called "stonks" - an intentional misspelling of "stocks" - favoured by retail traders on sites such as Reddit's WallStreetBets had also leapt again, although explanations for the moves were tenuous.

Some online stock watchers had even pointed to a picture posted by an activist GameStop investor of a McDonald's (NYSE:MCD) ice cream cone with a frog emoji as a cryptic sign. a marathon, not a sprint. Whatever happens resist the urge to sell. The longer we hold the higher it goes," said @catchme1fyoucan, one user in Italy of the retail trading platform eToro, in a discussion on GameStop.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Emerging markets

http://tmsnrt.rs/2ihRugV Global asset performance

http://tmsnrt.rs/2yaDPgn Up and away: global bond yields on the rise

https://tmsnrt.rs/3kesTqW Commodity currencies on the charge

https://tmsnrt.rs/2P5O5nr

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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