© Reuters. A man is reflected on a stock exchange in Tokyo
By Tom Wilson and Scott Murdoch
LONDON / HONG KONG (Reuters) – Global equities rose Tuesday as robust trade data from China added confidence in a recovery in domestic demand. Market participants waited for US data that suggest that inflation will pick up.
China's exports in US dollars rose over 30% year over year in March, while imports rose 38%, the fastest pace in four years, suggesting a rebound in domestic spending after the pandemic.
The broad euro rose by 0.3% to almost record highs, while the export-intensive German stocks rose by 0.2%. The Paris and London indices fell 0.1%.
Investors focused on March US inflation data due at 1230 GMT. Markets expect that a forecast rebound in inflation will accelerate recent moves by equity investors towards cyclical stocks.
"The question for the next few months is not whether inflation will accelerate, but how much inflation will accelerate," said Hugh Gimber, global markets strategist at J.P. Morgan Asset Management.
"We see scope for further hikes in government bond yields over the course of 2021. We would expect this to spur the continuation of the rotation we've seen over the past six months or so towards more cyclical sectors."
The US 10-year Treasury yield rose 1.6908%, below the 14-month high of 1.776% hit on March 30th. Bond yields rise when prices fall.
The MSCI World Equity Index, which tracks stocks in 49 countries, was down.
The futures ads on Wall Street were flat.
Previously, Asian stocks had received support for China's strong trading data, despite MSCI's broadest index for stocks in the Asia-Pacific region outside of Japan – as did China's blue-chip index, the CSI300.
"China is benefiting from its rapid 'first, first out' recovery, but the global economy is also accelerating and picking up, and this will detract from some of China's export performance in the coming quarters," said John Woods. Credit Suisse (SIX 🙂 & # 39; s Chief Investment Officer for Asia Pacific.
In the forex markets, the dollar rose from a nearly three-week low against other major currencies on Tuesday, helped by a surge in government bond yields.
The dollar has eased along with US yields this month after rising to multi-month highs as markets expect key fiscal stimulus, coupled with continued monetary easing, to accelerate US economic growth and higher inflation.
Eric Rosengren, president of the Boston Federal Reserve Bank, said Monday that the US economy could see a significant upturn this year due to loose monetary and fiscal policies, but the country's labor market continues to face weakness.
He said that with inflation still below the central bank's target rate of 2%, the current "very accommodative" monetary policy stance remains appropriate.
Futures were up 37 cents, or 0.5%, to $ 63.63 a barrel by 0744 GMT. Oil futures rose 27 cents, or 0.5%, to $ 59.58 a barrel.