Global stocks were set to extend a five-day run of record highs on Thursday, as Bitcoin took a breather after its latest surge. Russia’s markets plunged at the prospect of the harshest U.S. sanctions in years.
Reports said, the United States would announce sanctions later for alleged interference in U.S. elections and malicious cyber activity. On that report, the Russian rouble had already tumbled as much as 2%.
They were set to target both individuals and entities, according to a source, and could also include aggressive new measures targeting the country’s sovereign debt.
Saxo Bank’s head of FX strategy John Hardy said, there has been a bit of whiplash for the rouble. Earlier in the week, it looked like the U.S. was making overtures about a (Biden-Putin) summit, he said. Now, it looks like they are going to slap on sanctions, he added.
It was hard keeping up for traders, such as with Europe’s STOXX 600 opening with a new all-time high. A flurry of positive earnings offset rising concerns about a third wave of COVID infections on the continent.
Ahead of March retail sales data, the U.S. dollar was at a four-week low. Investors were increasingly convinced that U.S. interest rates will stay low. Whereas in Europe, a deluge of debt issuance pushed German bond yields up to four-week highs.
Elsewhere,Turkey was waiting for its first central bank meeting under its new governor. The previous one was ousted after hiking interest rates last month.
Wall Street and in Asia
After a mixed finish on Wednesday, Wall Street futures were on track to go higher. This was despite gains for large banks like Goldman Sachs and Wells Fargo. They got the U.S. earnings season off to a good start.
Overnight in Asia, the mood had been subdued with the Nikkei ending little changed. The main bourses of Hong Kong and China finished 0.5%-0.6% in the red.
In a note, JPMorgan Asset Management said it was trimming its overall emerging markets exposure once again mostly driven by a less sanguine outlook on EM Asia.
Global multi-asset strategist Patrik Schowitz said in a note, that China has now recovered enough that policymakers can afford to be more conservative. They can worry more about containing debt and property market risks, he wrote.
Moreover, earlier in the week, the bank had already recommended selling EM currencies.
Despite a bumpy IPO for crypto firm Coinbase, Bitcoin was just shy of its record high at $62,614 having now doubled in value this year.