US equity futures climbed alongside stocks in Europe and Asia as investors pushed benchmarks to record highs before commentary from Federal Reserve chairman Jerome Powell. Oil rose and Treasuries slipped.
Contracts on the three main American gauges pared earlier gains but remained in the green ahead of Powell’s testimony before Congress, where the Fed chair will likely give hints on monetary policy and how the expanding coronavirus outbreak from China is influencing policymakers. The Stoxx Europe 600 Index jumped to an intraday record, led by oil producers. Benchmarks in Hong Kong and Seoul rose at least 1%, while the Shanghai market climbed for a sixth session. Japan was shut for a holiday.
Momentum came from the US, where the S&P 500 Index closed at a fresh all-time high on February 10. Takeover target Sprint Corp soared more than 60% in the pre-market after T-Mobile US Inc was said to be poised to win court approval for its $26.5 billion takeover. The dollar nudged lower versus a basket of its major peers.
Investors have turned more bullish lately despite the novel flu-like epidemic, signalling confidence that central banks will act to shore up growth in the event of a global slowdown. San Francisco Fed President Mary Daly said that the US economy and policy were in a good place. Focus is also shifting to how companies are addressing the virus’s impact, with earnings due this week from firms such as Alibaba Group Holding Ltd, Credit Suisse Group AG and Airbus SE.
“At the margin, we have to consider that the rebound in growth we were expecting over 2020 may be either delayed or somewhat less vigorous than we were anticipating due to the impact of the virus,” Mark Robertson, head of multistrategy at Aviva Investors, said in an interview in Sydney. “But ongoing monetary policy support, especially what was delivered last year, a reduction in uncertainty around trade wars, should still be a tail wind.”
Elsewhere, oil futures clawed back some losses after hitting a one-year low in New York trading.
Earnings season continues with reports including MGM Resorts International and Softbank on Wednesday; Thursday will bring Alibaba, Nissan, Credit Suisse, Airbus, Nestle and AIG.
A key contest for Democrat presidential hopefuls unfolds Tuesday, when the state of New Hampshire holds a primary vote.
Fed Chairman Powell delivers his semiannual testimony on monetary policy in Congress on Tuesday and on Wednesday; ECB President Christine Lagarde speaks at the European Parliament in Strasbourg on Tuesday.
Thursday sees a gauge of underlying US inflation, the core consumer price index. It is forecast to increase to 0.2% in January, a faster pace than in December.
China and the US lower tariffs on billions of dollars of respective imports as part of the trade deal signed last month.
Futures on the S&P 500 Index increased 0.2% in New York. The Stoxx Europe 600 Index advanced 0.7%. Hong Kong’s Hang Seng Index jumped 1.3%. The MSCI Asia Pacific Index gained 0.5%. The MSCI World Index of developed countries climbed 0.2%.
The Bloomberg Dollar Spot Index declined 0.1%. The euro was little changed at $1.0916. The Japanese yen weakened 0.1% to 109.86 per dollar. The Turkish lira weakened 0.6% to 6.045 per dollar.
The yield on 10-year Treasuries gained one basis point to 1.58%. Germany’s 10-year yield advanced two basis points to -0.39%. Britain’s 10-year yield increased one basis point to 0.567%. Japan’s 10-year yield was unchanged at -0.055%.
Gold weakened 0.2% to $1,568.94 an ounce. LME aluminum climbed 0.8% to $1,715.50 per metric ton. Iron ore jumped 4.7% to $83.55 per metric ton.