World shares pushed on from one-month highs on Friday, with Asian stocks closing in on 2-1/2-year peaks, as growing expectations the Democratic party will win US elections next month revives hopes for more economic stimulus there.

The pan-European STOXX 600 index rose 0.4%, set for its second straight week of gains, while the MSCI world equity index, which tracks shares in 49 countries, was up 0.2% at a more than one month high.

Wall Street futures were up 0.5% after the S&P 500 gained 0.80% and the Nasdaq Composite added 0.5% on Thursday.

A widening lead for Democratic presidential candidate Joe Biden and the possibility his party will win both the Senate and the White House in the Nov. 3 vote has raised the prospect of a big economic stimulus.

That possibility is helping to counter investor wariness about a Democrat pledge to hike corporate tax rates.

“We do maintain a positive medium-term view for stocks into the middle of next year,” Mark Haefele, chief investment officer, UBS Global Wealth Management, wrote in a report.

“A stimulus deal will be struck eventually, central banks will continue to stay supportive, and medical developments still have scope to surprise.”

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, inching closer to its Aug. 31 peak, which was its highest level since March 2018.

China’s CSI300 index gained 2% after the Golden Week holidays. Japan’s Nikkei dipped 0.1% after reaching a 7-1/2-month high.

In a sign markets are pricing in a Biden victory, clean energy-related shares have outperformed in recent weeks. The iShares Global Clean Energy ETF has gained 14% so far this month, compared with 4% gains in the S&P 500 energy index.

“Biden seems to have a clear lead following the TV debate and a coronavirus cluster in the White House, which has raised questions about Trump’s crisis management capabilities,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

A new Reuters/Ipsos poll found Americans are losing confidence in US President Donald Trump’s handling of the coronavirus pandemic. His net approval on that issue has dropped to a record low.

The November contract of Volatility Index futures dropped to 30.25, its lowest level in three weeks, another sign of reduced worries about a contested election.

“The rise in US yields, particularly at the long end, suggests increased expectations of a blue wave in the election,” said Koichi Fujishiro, economist at Dai-ichi Life Research Institute.

The 10-year US Treasuries yield has risen 11 basis points so far this week. It hit a four-month high of 0.797% on Wednesday but has since slipped, in part due to weak economic data.

The 10-year German bond yield slipped 2 basis points to -0.536% while other core yields were 1-2 bps lower .

Data on Thursday showed the number of jobless claims in the United States came in 20,000 higher than economists expected at 840,000, showing unemployment in the world’s largest economy remains historically high and a recovery in the labour market is losing momentum.

Additionally, the World Health Organization reported a record one-day increase in global coronavirus cases on Thursday, led by a surge of infections in Europe.

In the currency market, the dollar eased 0.3% against a basket of currencies at 93.30, its lowest in nearly three weeks, and is down 0.8% on the week. It reached a two-month high of 94.75 in late September.

The Chinese yuan was the biggest beneficiary of the rising hopes of a Biden win, posting its biggest daily rise in more than four years after the holidays. The yuan was last up 1.2% at 6.7112 per dollar in onshore trade and up half a percent to 6.7024 per dollar offshore.

The euro rose 0.1% to $1.1776, while sterling added 0.2% to $1.2961 but fell against the euro after worse-than-expected UK gross domestic product data.

Oil prices dipped, but both benchmarks remained on course for their biggest weekly gains since early June due to supply cuts caused by a storm in the Gulf of Mexico and a strike of offshore workers in Norway.

Brent was down 0.8% at $43.01 a barrel. U.S. West Texas Intermediate crude fell 0.9% to $40.84.

A weaker dollar boosted gold, which gained 1.2% to $1,915.38 per ounce.

Reuters