Hopes of rapid economic recovery leads to weekly winning streak

European stocks marked their longest weekly winning streak since November 2019 as hopes of a rapid recovery in economic growth offset doubts over the euro zone’s COVID-19 vaccination programme.

Global sentiment was underpinned by the U.S. Federal Reserve’s pledge to keep its super-easy policy in place even as data showed the world’s largest economy kicking into higher gear.

London equities have outperformed this week, with the domestically focused FTSE mid-cap index notching a record high as Britain gradually emerges from a strict winter coronavirus lockdown. European stocks hit a series of all-time highs this week, despite setbacks on the vaccination front after European regulators found a potential link between AstraZeneca’s COVID-19 vaccine and reports of rare brain blood clots.

The S&P 500 and the Dow notched record closing highs on Friday after solid U.S. inflation data and an uptick in Treasury yields suggested the economic recovery from the pandemic-related recession was gaining momentum.

All three major U.S. stock indexes posted weekly gains as upbeat economic data boosted risk appetite ahead of first-quarter earnings. Transports, seen as a proxy for economic health, advanced for their 10th week in a row.

A Labor Department report showed producer prices rose last month at twice the speed of February’s growth, reviving some inflation worries.

U.S. Federal Reserve Chairman Jerome Powell offered assurances on Thursday that the central bank is far more concerned about the recent uptick in COVID19 infections than inflationary pressures.

The dollar inched higher against a basket of world currencies as inflation data lifted bond yields, but the greenback had its softest week of the year due to better-than-expected economic data and the dovish Fed.

Crude oil prices dropped on rising supply amid a mixed picture on demand recovery from the COVID-19 slump. Gold withdrew from Thursday’s one-month peak, weighed down by a rebounding dollar and rising Treasury yields. Still, the safe-haven metal appears headed for its first weekly gain in three.

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.