Asian markets start on firm footing on vaccine, U.S. aid hopes

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In this news, we discuss the Asian markets start on firm footing on vaccine, U.S. aid hopes.

SYDNEY (Reuters) – Asian markets started higher on Monday, buoyed by hopes of a US budget package ahead of next month’s US presidential elections and expectations of a coronavirus vaccine by the end of this year , although the mood was still cautious as infections surged.

The largest MSCI Asia-Pacific stock index outside of Japan .MIAPJ0000PUS added 0.26% for its second straight day of gains.

The index has risen in eight of the past 10 sessions amid a rally of risky assets backed by hopes for a coronavirus vaccine and expectations of a so-called ‘blue wave’, which would see Democrats claim victory in the November elections.

Stimulating general sentiment, drugmaker Pfizer Inc PFE.N said on Friday it could have a coronavirus vaccine ready in the United States by the end of this year.

Japan’s Nikkei .N225 climbed around 1% while South Korea’s KOSPI and Australian stocks .AXJO rose 0.7% each.

New Zealand’s .NZ50 was a little lower after Prime Minister Jacinda Ardern won a second term in the weekend election, having risen during the week in anticipation of such a result.

E-Mini futures for the S&P 500 ESc1 jumped 0.5% at the start of Asian negotiations after House Speaker Nancy Pelosi said on Sunday she was optimistic that legislation on a broad coronavirus relief program could be adopted ahead of the elections.

But with his negotiating partner, Treasury Secretary Steven Mnuchin, in the Middle East until Tuesday, such a timetable would appear overly optimistic, analysts said.

Investors are also concerned about the increase in coronavirus cases to help curb the spread of the disease.

Global coronavirus cases rose by more than 400,000 for the first time on Friday evening, a record one-day increase as much of Europe adopts new restrictions to stem the outbreak.

Investors are now awaiting China’s gross domestic product (GDP), monthly production and retail sales for the third quarter later in the Asian morning.

“Chinese growth has rebounded well after its first losses from COVID-19 and this data will be essential in identifying how the economy has progressed,” said Steven Dooley, chief strategist at Western Union Business Solutions.

Later in the week, key events include the minutes of the Australian central bank meeting, the final US presidential debate, and global manufacturing indicators.

Currency action was moderate with the US dollar generally seen as a safe haven = USD stable at 93.696 against a basket of six major currencies. [USD/]

The euro EUR = was also unchanged at $ 1.1715.

The British pound traded nearly two weeks at $ 1.2925 after UK Prime Minister Boris Johnson told businesses to prepare for a no-deal Brexit in case negotiations with the European Union fail to lead to a free trade agreement.

“EU-UK trade talks are flirting with collapse,” ANZ economists said.

“British Prime Minister Johnson said the UK must prepare for a no-deal outcome because the two sides cannot agree on a Canadian-style FTA. Talks resume in London on Monday, but without the political will to change ground, there is little negotiators can do. “

In commodities, Brent LCOc1 futures added 5 cents to $ 42.98 a barrel, and US West Texas Intermediate (WTI) CLC1 crude futures climbed 5 cents to 40.9 $ per barrel.

The XAU = spot gold was a firmer shade at $ 1,899.9 an ounce.

Editing by Sam Holmes

Original © Thomson Reuters

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