Stocks Rally on Vaccine Hopes; Dollar Weakens: Markets Wrap

 

These are the main moves in markets:

Stocks

• Futures on the S&P 500 Index climbed 0.9% as of 8:30 a.m. New York time.
• The Stoxx Europe 600 Index surged 1.7%.
• The MSCI Asia Pacific Index jumped 0.9%.
• The MSCI Emerging Market Index surged 1.2%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%.
• The euro jumped 0.4% to $1.1843.
• The British pound gained 0.3% to $1.3125.
• The Japanese yen was little changed at 105.77 per dollar.
• The offshore yuan strengthened 0.2% to 6.9059 per dollar.

Bonds

• The yield on 10-year Treasuries rose one basis point to 0.64%.
• The yield on two-year Treasuries gained less than one basis point to 0.15%.
• Germany’s 10-year yield jumped one basis point to -0.50%.
• Britain’s 10-year yield decreased less than one basis point to 0.203%.
• Japan’s 10-year yield declined one basis point to 0.027%.

Commodities

• West Texas Intermediate crude rose 1% to $42.69 a barrel.
• Brent crude climbed 1.2% to $44.78 a barrel.
• Gold strengthened 0.7% to $1,953.99 an ounce.

Here are some key events coming up:

• Earnings from companies including, ICBC, PetroChina, HP Inc., Royal Bank of Canada, Best Buy and Dollar General.
• The U.S. Republican National Convention takes place, with President Donald Trump speaking the final day, Aug. 27.
• The Bank of Korea sets monetary policy and will hold a briefing on Thursday.
• Fed Chair Jerome Powell speaks at event on Thursday.

U.S. equity futures climbed and European stocks rallied to a one-week high on signs that the Trump administration may fast-track vaccines and treatments for coronavirus.

AstraZeneca Plc shares gained 4% and travel stocks including American Airlines Group Inc. and United Airlines Holdings Inc. rose in pre-market trading. The dollar weakened against its peers, while gold traded near $1,950 an ounce.

Market sentiment was supported by news over the weekend that the U.S. Food and Drug Administration is working to expand access to a virus treatment involving blood plasma from recovered patients. Separately, the Financial Times reported that the Trump administration is considering whether to bypass regulatory standards to accelerate an experimental vaccine.

Asian stocks got a boost after a report that White House officials have reassured American businesses that a ban on its WeChat app won’t be as broad as feared. WeChat owner Tencent Holdings Ltd. jumped the most in a month, gaining $37 billion.

Defying History

Asian stocks are on pace for their best August performance since 2003

Source: Bloomberg

Investors will be focused this week on the Federal Reserve’s annual Economic Policy Symposium — typically held in Jackson Hole, Wyoming. Chair Jerome Powell is scheduled to speak on Thursday about the Fed’s long-awaited monetary policy framework review, which has focused on a new inflation strategy.

“We’re hoping to get some sort of hints as to where their fundamental view is going and there’s a lot of expectations around that,” said Marvin Barth, global head of foreign exchange and emerging markets macro strategy at Barclays Plc.

‘Past Peak Central Banking’ on View as Jackson Hole Goes Virtual

Meanwhile, storms Marco and Laura are rolling toward the U.S. Gulf Coast, where they’ll come ashore as hurricanes as soon as Monday. Almost 58% of crude output in the U.S. Gulf of Mexico production has been shut down as the threat prompted evacuations of off-shore energy platforms and set residents and officials on edge from Texas to Florida.

In other markets, New Zealand’s dollar fell against most peers. A flare-up of Covid-19 infections has prompted an extended lockdown in Auckland, fueling speculation the Reserve Bank may ease policy.

Nickel climbed to the highest since November on concern that rising demand from China’s stainless steel sector will tighten supplies.