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GLOBAL MARKETS-Stocks up as blue wave hopes lift U.S. stimulus bets

Stock MarketsOct 09, 2020 14:42
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* Revived hopes for U.S. stimulus boosts morale
* Biden victory getting priced into markets, analysts say
* Oil down, gold gains
* European shares higher
* China shares, yuan jump after a week-long holiday
* Euro zone periphery govt bond yields:

By Tom Arnold
LONDON, Oct 9 (Reuters) - 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 U.S. elections next month revives hopes for more
economic stimulus there.
The pan-European STOXX 600 index .STOXX rose 0.4%, set for
its second straight week of gains, while the MSCI world equity
index .MIWD00000PUS , which tracks shares in 49 countries, was
up 0.2% at a more than one month high.
Wall Street futures ESc1 were up 0.5% after the S&P 500
.SPX gained 0.80% and the Nasdaq Composite .IXIC 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 .MIAPJ0000PUS rose 0.3%, inching closer to its
Aug. 31 peak, which was its highest level since March 2018.
China's CSI300 index .CSI300 gained 2% after the Golden
Week holidays. Japan's Nikkei .N225 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 ICLN.O 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 U.S. 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 VXX0
dropped to 30.25, its lowest level in three weeks, another sign
of reduced worries about a contested election.
"The rise in U.S. 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
The 10-year U.S. Treasuries US10YT=RR 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% DE10YT=RR while other core yields were 1-2 bps lower
FR10YT=RR BE10YT=RR . 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 =USD 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 CNY=CFXS was last up 1.2% at 6.7112 per dollar in
onshore trade and up half a percent to 6.7024 per dollar
offshore CNH=D3 .
The euro EUR=EBS rose 0.1% to $1.1776, while sterling
GBP=D3 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. O/R
Brent LCOc1 was down 0.8% at $43.01 a barrel. U.S. West
Texas Intermediate crude CLc1 fell 0.9% to $40.84.
A weaker dollar boosted gold XAU= , which gained 1.2% to
$1,915.38 per ounce. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets
Global currencies vs. dollar
Emerging markets
MSCI All Country Wolrd Index Market Cap
Stocks versus COVID

GLOBAL MARKETS-Stocks up as blue wave hopes lift U.S. stimulus bets

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