US stocks edged higher as trade tensions between the world’s two biggest economies showed signs of abating. The dollar slipped and the 10-year Treasury yield pushed towards 3 percent.
The S&P 500 Index climbed as technology shares paced gains after President Donald Trump made a major reversal on an earlier move to block telecom equipment maker ZTE Corp. from its US suppliers. Treasury yields edged back towards 3 percent and the dollar retreated.
The euro jumped and German 10-year yields touched their highest level this month after a senior European Central Bank official said the first rate hike could come quarters, not years after the end of asset purchases.
Trump’s shock move on ZTE provided a sign that he may be open to easing trade tensions ahead of a meeting in Washington with Chinese officials this week. A slew of Federal Reserve officials speak in the five days, with investors looking for clues on the pace of monetary tightening.
In Europe, political pressures remain high as Italian populists near completion of a government plan, Britain faces a crunch week over Brexit, and the US formally moves its embassy to Jerusalem.
Elsewhere, oil traded below $71 a barrel as the UAE said OPEC has enough spare production capacity to mitigate any impact on crude markets if the US re-imposes sanctions on Iran. Earlier, most Asian markets advanced, and Malaysian stocks recovered from an early slide on the first trading day after last week’s unprecedented election result.
China plans to send Vice Premier Liu He to Washington for more trade talks. European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the UK. China releases data including industrial production and retail sales figures on Tuesday. UK Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union. US retail sales, industrial production are due this week. Vodafone Group, Home Depot, Credit Agricole, Tencent, Cisco Systems, Burberry Group, Walmart, Vivendi, AstraZeneca, Deere, Fujifilm, Noble Group, and Campbell Soup are among the companies releasing earnings this week.
The S&P 500 rose 0.3 percent in New York. The Nasdaq Composite Index added 0.3 percent The Stoxx Europe 600 Index fell 0.3 percent, the largest fall in more than a week. The MSCI Emerging Market Index advanced 0.3 percent, reaching the highest in more than three weeks on its sixth straight advance.
The Bloomberg Dollar Spot Index dipped 0.2 percent to 1,154.96, the lowest in more than a week. The euro climbed 0.4 percent to $1.1985, the strongest in more than a week. The British pound jumped 0.3 percent to $1.358, the strongest in almost two weeks on the largest climb in four weeks. The Swiss franc gained 0.2 percent to $0.9974, the strongest in almost two weeks. The yield on two-year Treasuries increased less than one basis point to 2.54 percent, hitting the highest in almost 10 years. The yield on 10-year Treasuries gained one basis point to 2.98 percent. Germany’s 10-year yield increased four basis points to 0.60 percent.