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Updated on August 1, 2021 5:34 PM

Global stocks hold near record highs

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LONDON / TOKYO – Global stocks held near record highs on Monday as concerns over the Delta variant of COVID-19 offset positive sentiment from growing Eurozone trading activity and a welcome US employment report .

The STOXX index of 600 leading European companies was flat, reversing previous losses after data showed euro zone companies expanding their activity at the fastest rate in 15 years in June.

Activity by British service companies also soared in June, albeit at a slightly slower pace. French stocks fell 0.4% when Health Minister Olivier Veran warned that France could be heading for a fourth wave of the pandemic due to the highly transmissible Delta variant.

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COVID-19 distress also weighed on Japan’s stocks, with the Nikkei falling 0.6% to a two-week low, following a surge in infections in Tokyo, just weeks before the city is host. of the Olympic Games.

MSCI’s broader Asia-Pacific equity index outside of Japan was flat.

China’s first-class stock index rebounded from previous losses to close 0.1% higher as Beijing’s pledges to continue political support for its tech sector helped counter concerns over a crackdown on the tech giant. Didi Global private tours and scrutiny from other platform companies in the country.

The MSCI All Country World Index closed at a record 724.66 last week and was up 0.1% on Monday.

Trading was lower than usual with US markets closed during the extended weekend of July 4.

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“The markets in general are still trying to recover,” said James Athey, chief investment officer at Aberdeen Standard Investments.

“Stocks, of course, continue to ignore or ignore anything that can be considered remotely negative as they continue their joyous and complacent dance toward an inevitable reckoning.”

S&P 500 futures posted a 0.1% drop to Tuesday’s open, after the index closed 0.8% higher at a record high on Friday. The Dow Jones Industrial Average rose 0.4% and the Nasdaq Composite added 0.8% to also hit a record high.

US nonfarm payrolls jumped 850,000 more jobs than expected last month, data showed on Friday. But the unemployment rate unexpectedly rose to 5.9% from 5.8%, while closely watched average hourly earnings, an indicator of wage inflation, rose 0.3% last month, below of the consensus forecast of a 0.4% increase.

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“The Goldilocks print suggests there is no need to accelerate the reduction schedule or implicit rate hike profile,” National Australia Bank analyst Tapas Strickland wrote in a note to the client.

“Overall, the payroll level is still 6.8 million below February 2020 pre-pandemic levels and is still below the level of substantial progress that the Fed needs. As such, there is nothing in this report on the for the Fed to get aggressive. “

Eyes will be focused on the minutes of last month’s Federal Open Markets Committee meeting, when lawmakers surprised markets by signaling two rate hikes by the end of 2023.

Comments from Fed officials since then have been more balanced, particularly from Chairman Jerome Powell, and investors are scrutinizing Wednesday’s statement for more clues about the timing of the policy tightening.

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Eurozone government bond yields rose, but analysts expect the recent downward trajectory to resume after the US payroll data.

The yield on Germany’s 10-year Bund rose half a basis point to -0.231%.

The dollar was mostly flat on Monday after falling from a three-month high at the end of last week, pressured by weaker details in the US payroll report.

The dollar was up about 0.2% to $ 1.1859 per euro and traded unchanged at 111.05 yen.

Gold rose 0.3% to $ 1,792.30 an ounce.

Crude oil had a limited range as the OPEC + talks dragged on. Saudi Arabia’s energy minister on Sunday rejected opposition from fellow Gulf producer the United Arab Emirates to a proposed OPEC + deal, calling for “compromise and rationality” to secure a deal when the group reconvenes. on Monday.

Brent crude added 0.1% to $ 76.21 a barrel and US crude gained 0.1% to $ 75.25 a barrel.

(Editing by Sam Holmes and Angus MacSwan)

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In-depth reports on the economics of innovation from The Logic, presented in association with the Financial Post.

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