Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

GLOBAL MARKETS-World stocks rise, markets bet on U.S. Congress stimulus deal

Published 11/08/2020, 09:48
Updated 11/08/2020, 09:54
© Reuters.

* Dollar slipping and stocks on the march
* MSCI AxJ +1%, Nikkei +1.85%, Hang Seng +2.3%
* U.S.-China trade talks eyed
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

(Updates throughout, changes byline and dateline)
By Sujata Rao
LONDON, Aug 11 (Reuters) - World stocks inched to 5-1/2
month highs on Tuesday, lifted by bets a U.S. fiscal stimulus
package will be reached and by signs Sino-U.S. tensions have
eased ahead of a crucial round of trade talks.
While investors took cheer from an order from President
Donald Trump restoring some enhanced unemployment payments and
suspending payroll taxes, the mood is watchful as sparring
continues in the U.S. Congress over extending fiscal stimulus.
Economic data worldwide also remains a cause for concern,
the latest being a steep drop in exports from trade bellwether
South Korea and Britain seeing its biggest job losses since
2009. But Brent crude futures stayed close to five-month highs
LCOc1 and the dollar index held at a one-week high =USD
after U.S. Treasury Secretary Steven Mnuchin said he was
optimistic a bipartisan stimulus deal will be reached soon.
Commerzbank analysts said markets were shrugging off doubts
over the legality of Trump's order and appeared convinced
Congress would agree a deal "Not without good reason, because in the election campaign
both parties have an interest in presenting themselves well,"
they said.
"Who wants to be seen as the stingy bad guy even in times of
great need?"
A pan-European share index rose almost 1% .STOXX , with
auto shares leading the way after a surge in Chinese car sales
and futures tipped a stronger Wall Street ESc1 open.
MSCI's global equity index rose 0.4% .MIWD00000PUS while a
benchmark of Asian shares outside Japan .MIAPJ0000PUS gained
nearly 1%. Japan's Nikkei .N225 climbed 1.9%.
The world index is now a whisker off February record peaks.

There are also hopes Beijing's sanctions on 11 U.S. citizens
- a response to U.S. sanctions on Chinese individuals over the
Hong Kong crackdown - may end this round of tit-for-tat moves
between the two powers.
"It has left the White House untouched," said Vishnu
Varathan, head of economics at Mizuho Bank in Singapore.
"That gives some relief that China is still giving some
priority to the (trade deal) dialogue," he said.
U.S. and Chinese officials hold talks on Saturday to review
the first six months of the Phase 1 trade deal. While China is
lagging targets on energy and farm goods purchases from the
United States, markets seem confident trade ties will be
insulated from the diplomatic noise Such optimism kept safe haven assets under gentle pressure,
with gold XAU= and other precious metals down 1%-3% on the day
while 10-year U.S. Treasury yields US10YT=RR were near a
two-week high of 0.5870%.
Mainland Chinese shares were the exception, dragged some 1%
lower by jitters before the talks and weaker tech shares,
following the U.S. Nasdaq drop the previous day .SSEC
.CSI300
Jason Borbora-Sheen, portfolio manager at Ninety One Asset
Management, said headlines would generate oscillations, but the
issue did not pose serious risks "from an equity perspective or
from a corporate perspective, simply because that issue has been
at the forefront of investors (minds)".

ONWARDS AND UPWARDS
Tuesday's gains follow a robust Wall Street session when the
Dow .DJI and S&P500 .SPX rose and investors rotated towards
value stocks and out of tech, reflecting optimism over the
growth outlook. The S&P 500 sits less than 1% below a February record high
hit in February, while Asian ex-Japan shares are within 2% of a
January peak.
On the currency markets, the euro-dollar flatlined
EUR=EBS . The euro is down 1.6% over the last three sessions as
its 10% rally since March loses steam.
One factor underpinning the dollar's decline - and equity
strength - is the declining real, or inflation-adjusted,
Treasury yield.
But in a danger signal for the euro-dollar rally, German
real yields seem to have caught up with U.S. peers as euro zone
inflation expectations have risen. EUIL5YF5Y=

Risk-sensitive currencies, such as the Australian and New
Zealand dollars, firmed AUD=D3 NZD=D3 JPY=D3 and Asian
gains lifted an emerging currency index almost 2%.
Even the battered Turkish lira inched up after four
lossmaking sessions .MIEM00000PUS TRY= .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
German vs US real yields https://tmsnrt.rs/2PEuXdm
World stocks market cap https://tmsnrt.rs/2XO8NtE
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.