Stocks and US futures rise as investors focused on the prospect for more stimulus and improving corporate earnings. The offshore yuan falls after China’s central bank took steps to restrain a recent rally.
The Europe Stoxx 600 Index gained 0.5%, Nasdaq 100 Index futures added 1% and the MSCI Asia Pacific Index rallied to the highest since mid-2018. Chinese stocks gained on optimism that President Xi Jinping is planning to further open parts of the economy to foreign investment.
Elsewhere in markets, crude oil and gold declined, while the dollar index strengthened. Treasuries are closed for a US holiday.
E-commerce retailer Allegro.eu SA shares jumped as much as 51% in its stock market debut, becoming the largest company on the Poland’s main exchange.
Markets globally have marched higher in the past week with investors growing confident in the likelihood of more stimulus while fears about a contested US election start to diminish. Earnings season will also coming into focus as companies prepare to deliver third-quarter results in the coming days.
“We’re heading for another US-focused week,” said Robert Greil, chief strategist at Merck Finck Privatbankiers AG. “There seems to be a bit more hope on a fiscal program breakthrough before the elections, and hopes for a better-than-consensus-based earnings season to start on Tuesday.”
In Asia, the Hang Seng Index rallied 2.2%, while the yuan weakened 0.6% to 6.7302 per dollar. China scrapped a rule that made it expensive to bet against the yuan and the People’s Bank of China set its daily reference rate only slightly weaker than analysts expected.
“We still see scope for further yuan appreciation, especially with China’s strong growth momentum, wide yield differential and strong inflows in part due to index inclusion,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. in Singapore. “But the authorities want to encourage more two-way flows, and removing the reserve requirement will help.”
Futures on the S&P 500 Index gained 0.2% as of 11:06 am London time and the Stoxx Europe 600 Index rise 0.5%.
While the MSCI Asia Pacific Index climbed 0.6%, the
MSCI Emerging Market Index
The Bloomberg Dollar Spot Index climbed 0.2% to 1,164.82 and the euro dipped 0.2% to $1.1803.
While the British pound fell 0.1% to $1.3018, the Japanese yen strengthened 0.1% to 105.52 per dollar.
The yield on 10-year Treasuries was unchanged at 0.77% and the yield on two-year Treasuries was unchanged at 0.15%.
While Germany’s 10-year yield dipped one basis point to -0.54%, Britain’s 10-year yield decreased one basis point to 0.274%.
West Texas Intermediate crude dipped 1.3% to $40.02 a barrel and gold weakened 0.4% to $1,922.55 an ounce. LME copper declined 0.1% to $6,768 per metric ton.