Stocks Rise After Yellen Rate Comments, G7 Tax Plan
Sumaira FH Published June 07, 2021 | 04:30 PM
London, June 7 (UrduPoint / Pakistan Point News - 7th Jun, 2021 ) :Stock markets largely rose and the Dollar fell Monday after US Treasury Secretary Janet Yellen downplayed fears over the prospect of higher interest rates triggered by a spike in inflation.
Investors weighed also moves over the weekend by the G7 group of wealthy nations towards an eventual global minimum corporate tax rate aimed firmly at tech giants seen as not paying enough.
Elsewhere Monday, US oil prices briefly topped $70 per barrel for the first time in 2.5 years as the pandemic-hit global economy pushes on with its recovery.
"Inflation remains squarely in focus and the largest potential source of investors' angst and market volatility this week," noted Neil Wilson, chief market analyst at Markets.com.
Yellen told Bloomberg news that US President Joe Biden should push ahead with his $4.0-trillion recovery plan for the world's top economy even if it triggers high inflation that leads to interest rate rises.
While optimism about the global economic recovery and vaccine roll-outs have spurred markets, trading floors remain worried that the rebound will cause strong price rises and in turn force central banks to hike borrowing costs.
Yellen said any inflation spike in reaction to Biden's massive plan to revitalise the US economy would be transitory and that higher interest rates would actually be positive.
"If we ended up with a slightly higher interest rate environment, it would actually be a plus for society's point of view and the Fed's point of view," the former Federal Reserve chair said in an interview Sunday with Bloomberg.
"We've been fighting inflation that's too low and interest rates that are too low now for a decade," she said, adding she wanted them back to a normal level.
While higher rates raise the cost of borrowing for governments, businesses and individuals, they boost the profits of banks and other lenders and increase the value of people's deposited savings.
Yellen was speaking after returning from a meeting of G7 finance ministers in London which endorsed a global minimum corporate tax rate of at least 15 percent, rallying behind a US-backed plan targeting tech giants and other multinationals.
Wall Street meanwhile reopens Monday after last week's tepid US jobs report eased concerns that the expanding economy would force the Fed to pull back on stimulus.
Traders have shrugged off lower-than-expected Chinese trade growth figures for May, as imports still expanded at the fastest pace in more than a decade, up 51 percent year-on-year.
Exports expanded by 28 percent.
"To be honest, that is a cracking number by anybody's standard and show that global demand remains robust," said OANDA's Jeffrey Halley.
Imports and exports to China's major trade partners including Southeast Asia's ASEAN bloc, the European Union and the United States have risen in the first five months this year, Chinese customs authorities said.
- Key figures around 1045 GMT - London - FTSE 100: UP 0.3 percent at 7,089.79 points Frankfurt - DAX 30: UP 0.2 percent at 15,726.73 Paris - CAC 40: UP 0.3 percent at 6,535.02 EURO STOXX 50: UP 0.3 percent at 4,099.88 Tokyo - Nikkei 225: UP 0.3 percent at 29,019.24 (close) Hong Kong - Hang Seng Index: DOWN 0.5 percent at 28,787.28 Shanghai - Composite: UP 0.2 percent at 3,599.54 (close) New York - Dow: UP 0.5 percent at 34,756.39 (close) Euro/dollar: UP at $1.2153 from $1.2129 at 2130 GMT Friday Pound/dollar: UP at $1.4136 from $1.4104 Euro/pound: FLAT at 85.96 pence Dollar/yen: DOWN at 109.44 Yen from 110.30 yenBrent North Sea crude: DOWN 0.6 percent at $71.46 per barrelWest Texas Intermediate: DOWN 0.6 percent at $69.24 per barrel
Related Topics
Recent Stories
HEC reviews curricula for environmental sciences degree programme
ICC Asia looking forward to an action-packed Asia Cricket Week
Yuvraj Singh named ICC Men’s T20 World Cup 2024 Ambassador
Greece hands Olympic flame to 2024 Paris Games hosts
Two Kyiv hospitals evacuating over feared Russian strikes
World must act on neurotech revolution, say experts
Charles & Catherine's cancer diagnoses
Champions Alcaraz and Sabalenka through in Madrid Open
King Charles to resume some public duties during cancer treatment: palace
US defense chief announces $6 bn in security aid for Ukraine
Heavy rains cause damage to Spezand-Taftan railway track
Woman stabbed in Israel, attacker killed: police
More Stories From Miscellaneous
-
Modern Education Techniques: A pathway to achieve economic development
13 hours ago -
Kite Flying: From cultural festival to deadly sport
13 hours ago -
PDMA predicts gusty wind, rain with thunder, hails
3 days ago -
Iranian president Raisi given guard of honour at PM House
5 days ago -
Intellectuals, writers accolades Naseer Mirza on his literary contribution
5 days ago -
Bahawalpur Adabi Sangat hosts memorable mushaira
5 days ago
-
Cattle farming vital to alleviate poverty in rural areas
5 days ago -
Pakistan: A land of tourism, archeological wonders
6 days ago -
Transforming education sector: from job hunters to job creators
8 days ago -
Amjad Bobby remembered on 19th death anniversary for timeless contributions to music
11 days ago -
Legendary actor Nadeem’s 26 films released on Eid-ul-Fitr days in 50 years
12 days ago -
Besant Hall Cultural Centre to celebrate evening with Sanam Marvi on 26 April
12 days ago