* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* For Reuters Live Markets blog on European and UK stock
markets,
please click on: LIVE/
(Updates prices, adds commentary and chart)
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 overnight. 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, a positive sign after months of disputes over
the COVID-19 pandemic, China's national security law and Chinese
technology firms. 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.
European share indexes strengthened, with the STOXX 600 up
0.7% .STOXX and London's FTSE 100 up 0.2% .FTSE at 1103 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 0.8%.
U.S. stock index futures rose for the fourth session in a
row.
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.
Hewson said that on Tuesday the rise could be attributed to
inertia and a lack of bad news. Expectations of continued
central bank stimulus means that the default position for
markets is to be rising, he said.
The director of the Oxford Vaccine Group said on Tuesday
that the vaccine in development could be put before regulators
this year. The dollar index fell, down 0.2% at 93.083 by 1208 GMT
=USD , while the euro was up 0.3% at $1.1827 EUR=EBS .
Euro zone bond yields rose for the second day in a row, with
the benchmark ten-year German Bund yield up 6 basis points at
-0.438% 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 represents the sharpest fall since Germany began to
record quarterly GDP calculations in 1970. But German business morale improved more than economists had
expected in August, boosting hopes for a strong recovery from
the coronavirus shock in Europe's largest economy. Oil prices were up, with Brent crude oil futures LCOc1 up
0.7% at $45.46 a barrel by 0806 GMT. West Texas Intermediate
crude CLc1 up 0.2% at $42.71 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 awaiting details on possible changes to
how the Fed targets inflation. In the current environment, that
could mean the Fed sticks with aggressive stimulus longer than
under its previous rubric.
"Unless you get rid of social distancing completely, then
the investment narrative and paradigm has changed completely. I
think central banks are in for the long term," CMC's Hewson
said.
"I don't think Powell is going to be anything other than
doveish and obviously that will be a tailwind for stocks."
Markets seemed indifferent to news that two European
patients and a Hong Kong man are confirmed to have been
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Emerging markets http://tmsnrt.rs/2ihRugV
Asset performance in dollar terms https://tmsnrt.rs/3hs2F23
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