Picture used for illustrative purpose.

World shares inched higher while US bond yields held near a 13-month peak on Monday on bets that economic growth would accelerate, even though investors became wary of the Federal Reserve and other key central bank meetings in the days ahead.

The $1.9 trillion stimulus bill President Joe Biden signed into law last week and the rollout of COVID-19 vaccinations stoked a bullish mood, but the focus was gradually turning to the outlook for monetary policy.

“The Federal Reserve is expected to rigidly stick to its easing plans, despite (Fed Chair Jerome) Powell & Co likely becoming significantly more upbeat on the outlook,” said AFS analyst Arne Petimezas in Amsterdam.

“However, the risks are towards a hawkish surprise. The $1.9 trillion stimulus has been adopted without much ado and the Biden administration has now set its sights on a big figure infrastructure bill,” he said.

European shares rose 0.4%, led by travel stocks , to hit pre-pandemic levels for the first time. S&P 500 futures rose 0.1%, just below a record high level touched last week.

The MSCI world equity index, which tracks shares in 49 countries, was just above parity by 1159 GMT.

Mainland Chinese shares, however, dropped despite data showing accelerating industrial output and a rise in retail sales. The blue-chip CSI 300 index fell 2.2% on policy tightening worries.

Surveillance equipment maker Hikvision lost 3.2% after the U.S. Federal Communications Commission designated it, along with four others Chinese companies including Huawei, as posing a threat to national security.

The US House of Representatives gave final approval last week to the COVID-19 relief bill, giving Biden his first major victory in office.

“This will provide another shot in the arm for a US economy sprinting out of a deep hole (10 million jobs are still missing at present),” said Natixis economist Troy Ludtka in New York.

“We see the macro backdrop - stimulus included - as being sufficient to jolt the U.S. economy beyond the 6% growth mark,” he said in a note.

Investors also suspect the $1.9 trillion package, which amounts to more than 8% of the country’s GDP, could stoke inflation - to the detriment of bonds, especially when their yields are so low.

Rising inflation expectations could prompt the Federal Reserve to signal it will start raising rates sooner when it announces its latest economic projections at the end of Federal Open Market Committee meeting on Wednesday.

“Following the fiscal stimulus packages it is inevitable that Fed GDP forecasts will be revised up, and some FOMC members might think rates will have to move higher sooner than they anticipated last December,” economists at ANZ said.

The Bank of England and Bank of Japan also have meetings on Thursday and Friday this week.

The 10-year U.S. Treasuries yield stood at 1.631%, having hit 1.642% on Friday, a high last seen in February last year.

Higher U.S. bond yields saw the dollar rising against other major currencies. The dollar index rose nearly 0.2%.

The euro slipped 0.3% to $1.1922 from last week’s high of $1.1990. The dollar hit a nine-month high of 109.36 against the Japanese yen.

The British pound slipped 0.4% to $1.391, but hopes for an economic recovery in Britain helped it hold above $1.39 after falling more than 1 cent versus the dollar on Friday.

Bitcoin fell 4.7% from a record high set over the weekend after Reuters reported that India would propose a law banning cryptocurrencies. Oil prices pared gains after initially rising on data showing China’s economic recovery accelerated, boosting the energy demand outlook at the world’s largest oil importer.

Brent crude was down 0.1% to $69.14 a barrel. US West Texas Intermediate crude eased 0.1% to $65.55.

European stock markets advanced Monday on hopes that vaccines and stimulus would help fuel a global economic recovery from the coronavirus crisis, dealers said.

Approaching the half-way stage, London and Paris each climbed 0.3 percent and Frankfurt was up 0.1 percent.

Milan added 0.7 percent despite the re-imposition of lockdown restrictions in most of Italy to curb a new virus outbreak.

The dollar largely firmed ahead of Wednesday’s US Federal Reserve monetary policy meeting.

Brent oil topped $70 per barrel on positive industrial production and retail sales data in key crude consumer China, while the dollar rose versus the euro and yen.

“Investors continue to anticipate speedy economic recoveries as the powerful forces of accelerating vaccine rollouts and significant financial assistance combine,” said Richard Hunter, head of markets at trading firm Interactive Investor.

Bitcoin slid under $56,000 after hitting a record $61,742 on Saturday on keen investor demand for the world’s most popular cryptocurrency.

Asian stock markets closed mixed as early rallies ran out of steam.

Investors have been emboldened this year as Covid vaccine rollouts and the easing of most lockdowns have stoked recovery hopes.

Bets on a strong rebound this year increased last week as US President Joe Biden signed off on his vast $1.9-trillion stimulus plan, which includes big cash handouts for struggling Americans.