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* MSCI all-country world share index at record high
* European indexes climb early on, U.S. futures gain
* Oil crosses $60 a barrel
* Hopes of $1.9 trln U.S. stimulus, vaccines boosting
sentiment
* U.S. dollar retreats from recent highs
* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2021 http://tmsnrt.rs/2egbfVh
*
By Marc Jones
LONDON, Feb 8 (Reuters) - World shares set another record
high on Monday and oil surpassed $60 a barrel for the first time
in a year, on hopes that a $1.9 trillion COVID-19 aid package
will be passed by U.S. lawmakers as soon as this month.
Even news that South Africa had halted the rollout of
AstraZeneca's vaccine after a study showed it gave only limited
protection against the country's more contagious variant of the
virus wasn't going to put equity markets off.
MSCI's 50-country index of world stocks hit
its ninth record high of 2021 overnight as Tokyo's Nikkei
jumped on talk of Japan's relaxing emergency
restrictions and as China's markets got busy before the
start of the lunar new year.
Europe then made a strong start to the week as higher oil
prices and inflation expectations lifted basic resource
and banking shares 2% and 1.5%, and France's Veolia
launched a hostile 11.3 billion-euro takeover bid for waste and
water rival Suez.
"A generalised risk-on tone is pushing stocks higher,"
UniCredit's analysts said in a note.
Bond markets were moving, too, as focus intensified on how
far inflation might rise if the current mix of stimulus, rising
oil and food prices and expectations for a reopening economies
continue to hold.
Ten-year U.S. Treasury yields, which are one of the main
drivers of global borrowing costs, climbed above 1.2% for the
first time since the peak of coronavirus uncertainty last March.
Break-even rates, which account for inflation, traded as
high as 2.21%, their highest since 2014 while in Europe,
Germany's 10-year yields were near five-month highs at -0.42%
, near .
"It will be hard not to see inflation in something when we
get what is likely to be a short-term stimulus boost," Deutsche
Bank's Jim Reid said, referring to planned U.S. stimulus.
"Whether that will be in goods, wages or asset prices or all
three remains to be seen, but it seems inevitable there will be
an impact."
That renewed focus on inflation came as Brent crude
touched an intraday high of $60.06 a barrel, the highest since
January last year.
Saudi Arabia's pledge of extra output cuts in February and
March on the back of reductions by other OPEC members its
allies, including Russia, is helping to limit supply and support
prices.
In a further sign of that supply dynamic, the six-month
Brent spread <LCOc1-LCOc7> hit its highest in more than year,
$2.45. OCBC's economist Howie Lee said the Saudis had sent
another "very bullish signal" last week too by keeping its Asian
prices unchanged.
"I don't think anybody dares to short the market when Saudi
is like this," he said.
STIMULUS
Asia's overnight rally had seen Japan's Nikkei close
up 2%, Chinese blue-chip shares advance 1.5% and
Australian shares finish 0.6% higher.
Wall Street futures were pointing 0.3% higher after the
Nasdaq and S&P 500 both climbed to record highs on Friday as
weak monthly U.S. jobs data supported expectations
of stimulus and after some strong corporate earning.
U.S. President Joe Biden and his Democratic allies in
Congress forged ahead with their stimulus plan on Friday as
lawmakers approved a budget outline that will allow them to
muscle through in the coming weeks without Republican support.
U.S. Treasury Secretary Janet Yallen predicted the United
States would reach full employment next year if Congress can
pass its support package.
"That's a big call, given full employment is 4.1%, but one
that will sit well with the market at a time when the
vaccination program is being rolled out efficiently in a number
of countries," said Chris Weston, Melbourne-based chief
strategist at Pepperstone.
Expectations of a U.S. economic recovery have not boosted
the dollar, however, "although much of the optimism towards U.S.
macro is probably well founded," said Kristoffer Kjær Lomholt,
chief analyst, FX and rates strategy at Danske Bank.
"The U.S. jobs recovery has more or less stalled (though),
and that did leave some space to take EUR/USD higher. The next
big theme that may be priced further in to spot is moving ahead
with U.S. fiscal talks."
Indeed, the dollar came off a four-month high against the
Japanese yen to be last at 105.50. The euro was
weaker again though at $1.2022 after rising 0.7% on Friday to a
one-week high.
Data showed German industry avoided a contraction in
December. Despite coronavirus lockdowns at home and abroad,
demand from China helped export-oriented manufacturers in
Europe's largest economy weather the COVID-19 pandemic.
The risk-sensitive Australian dollar eased from a
one-week high to $0.7655 while South Africa's rand fell
nearly 0.5% after its AstraZeneca vaccine troubles.
(Additional reporting by Swati Pandey in Sydney, editing by
Larry King)
