World stocks rallied on Monday to their highest levels since mid-December after China reopened its borders while benchmark Treasury yields drifted lower as investors scaled back expectations for further rate hikes by the Federal Reserve.
The gains were broad across equity markets, with Europe's STOXX 600 near a one-month high (.STOXX) and emerging market stocks (.MSCIEF) up 2.4% on the day. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose to its highest in more than six months.
“The market is reading that wage pressures are easing quite rapidly and seeing that as positive and potentially people (are) whispering the words 'soft landing' more loudly now,” said Hani Redha, global multi-asset portfolio manager at PineBridge.
A soft landing is the ideal Fed policy goal after raising interest rates, a situation in which inflation slows but there are not enough job losses to trigger a recession.
Reuters
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