Global shares rose for a ninth day running today, just off record highs, as investors digested recent gains. — AFP picLONDON, Feb 11 — Global shares rose for a ninth day running today, just off record highs, as investors digested recent gains, while bulls were sustained by the promise of more free money after a benign US inflation report and a dovish Federal Reserve outlook.
Investors were also reflecting on the first phone call between US President Joe Biden and his Chinese counterpart, Xi Jinping, where Biden said a free and open Indo-Pacific was a priority and Xi warning confrontation would be a “disaster” for both nations. “Only the Fed can rock the boat and with yesterday’s disappointing inflation print that prospect has just slipped even further into the future.”
Notably, Powell emphasised that once pandemic effects were stripped out, unemployment was nearer 10 per cent than the reported 6.3 per cent and thus a long way from full employment. “Financial conditions are expected to remain highly supportive of the US economy and global financial markets in 2021, and likely through 2022,” he said.
After the US inflation report and the Fed’s Powell reiterating that rates could stay lower for longer, the US dollar slipped before steadying during European trading. The dollar index was flat at 90.438, away from a 10-week top of 91.600 touched late last week.