Markets positive on prospects for economic recovery

World shares traded near record highs on Monday, as markets were generally upbeat about the prospects for a global economic recovery from COVID-19, ahead of a busy week for earnings.

Europe’s STOXX 600 reached a record high and was up 0.2% at 0736 GMT. Asian shares hit onemonth highs overnight. MSCI world equity index, which tracks shares in 49 countries, was flat on the day, having come close to but not surpassed Friday’s record high. MSCI’s main European Index was up 0.1%.

Matthias Scheiber, global head of portfolio management at Wells Fargo Asset Management cited low interest rates, the rollout of COVID-19 vaccines and the fiscal stimulus package in the United States as reasons for his bullish stance on equities.

Earnings from IBM and CocaCola are due later in the session. Netflix reports on Tuesday. Later in the week, American Airlines and Southwest will be the first major post-COVID cyclicals to post results.

The European Central Bank meeting on Thursday will also be in focus this week. ECB President

Christine Lagarde said last week that the euro zone economy is still standing on the “two crutches” of monetary and fiscal stimulus and these cannot be taken away until it makes a full recovery.

Euro zone government bond yields were lower, with the benchmark German 10-year yield down one basis point at - 0.27%.

The benchmark U.S. Treasury yield, which dropped as low as 1.528% last Thursday, was at 1.5606%. The U.S. economy is set to take off this year as more Americans get COVID-19 vaccinations and become comfortable engaging in a wider range of activities, but any accompanying spike in inflation is likely to be temporary, the Federal Reserve’s newest board member said on Friday.

Bitcoin was up nearly 2% at around $57,400, nursing losses from Sunday, when it plunged as much as 14% to $51,541.

Oil prices fell as rising COVID19 infections in India prompted concern than stronger measures to contain the pandemic would hurt economic activity.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.