* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
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By Elizabeth Howcroft
LONDON, Aug 25 (Reuters) - European shares opened higher on
Tuesday, with market sentiment propped up by the United States
and China saying they are still committed to their Phase One
trade deal, and some increased optimism around COVID-19 vaccine
development.
After the STOXX 600 saw its biggest daily gain in almost two
weeks on Monday, the bullish mood continued throughout the New
York and Asian sessions. Top U.S. and Chinese officials had a phone call in which
they reaffirmed their commitment to the Phase One trade deal
agreed in January, in a positive sign after months of disputes
over the COVID-19 pandemic, China's national security law and
Chinese technology firms. The news lifted Asian currencies and stocks, with the
Chinese yuan firming slightly overnight. Market sentiment was also buoyed by a Financial Times report
that the U.S. government was considering fast-tracking an
experimental vaccine, developed by the University of Oxford and
AstraZeneca, to make it ready before the November elections.
A spokeswoman for AstraZeneca denied the company had
discussed an emergency use authorization for its potential
vaccine with the U.S. government.
The director of the Oxford Vaccine Group said on Tuesday
that the vaccine in development could be put before regulators
this year. European share indexes opened higher, with the STOXX 600 up
0.4% .STOXX and London's FTSE 100 up 0.3% .FTSE at 0803 GMT.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.2%. MSCI's main European Index
.MSER was up 0.7%.
VACCINE TREATMENT
"It has been suggested that yesterday's rally was as a
result of optimism over a new vaccine treatment being fast
tracked by October, however the reality is that anyone with an
ounce of common sense will know that this outcome is highly
unlikely to happen," wrote Michael Hewson, chief market analyst
at CMC Markets UK.
"Yesterday's rebound was probably driven by nothing more
than a lack of bad news, fear of missing out, and expectations
of continued central bank monetary stimulus," he said.
Hewson added that the rebound in U.S. stocks could be called
"unbalanced" as it is being driven by a relatively small group
of big technology companies.
The dollar index fell gradually overnight, down 0.2% at
93.061 by 0803 GMT =USD , while the euro was up 0.4% at
$1.18325 EUR=EBS .
Euro zone bond yields rose for the second day in a row, with
the benchmark ten-year German Bund yield at -0.468% DE10YT=RR .
Germany's final second quarter GDP was revised slightly
upwards to a 9.7% contraction in April, May and June, up from
10.1%. This record decline is much stronger than in the financial
crisis more than a decade ago, and is the sharpest fall since
Germany began to record quarterly GDP calculations in 1970.
Oil prices were mixed, with Brent crude oil futures LCOc1
up 0.3% at $45.25 a barrel by 0806 GMT, while U.S. West Texas
Intermediate crude CLc1 was down 0.2%, at $42.55 a barrel.
Market participants are looking ahead to the U.S. Federal
Reserve Chair Jerome Powell's address at the Jackson Hole
symposium - his first public appearance since the central bank's
policy meeting in late July. Investors have been eagerly awaiting details on possible
changes to how the Fed targets inflation that, in the current
environment, could mean the Fed sticks with aggressive stimulus
measures longer than under its previous rubric.
Markets seemed indifferent to news of the first documented
instance of coronavirus re-infection in a human. A Hong Kong man
who recovered from COVID-19 was infected again four-and-a-half
months later, researchers at the University of Hong Kong said on
Monday. Elsewhere, France said it will require travellers entering
the country from the UK to self-certify that they are not
suffering coronavirus symptoms or have been in contact with a
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