Stocks inch to two-week high after Trump leaves hospital

In this news, we discuss the Stocks inch to two-week high after Trump leaves hospital.

LONDON (Reuters) – Global stock markets nearly peaked more than two weeks on Tuesday after US President Donald Trump returned to the White House from the hospital where he was treated for COVID-19, and expectations of ‘a new American stimulus package agreed to have increased.

Europe experienced a stuttering start with the plunge of London’s FTSE .FTSE and little traction from France .FCHI, Italy .FTMIB or Germany .GDAXI, despite a “remarkable” jump in orders German industrialists. [GVD/EUR]

Wall Street and most of Asia rallied overnight after Trump’s return from the Walter Reed Medical Center military hospital outside Washington soothed nerves over possible disruption presidential elections next month.

Gold [GOL/], obligations [GVD/EUR] and the dollar [/FRX] suffered losses amid slightly improved risk appetite, although Wall Street futures slipped into the red and oil lost its strong momentum overnight.[O/R]

“The market is running out of punch a little bit,” said Societe Generale’s Kit Juckes, noting Europe’s moderate start.

“He hasn’t managed to get a significant boost (Trump is released from the hospital) and I think he’s threatening to take a time out and wait for what’s to come,” he said. he adds.

Trump returned to the White House on Monday after a three-night stay in the hospital and said he was feeling “really good”, although one of his doctors warned he might not be out of the woods later in the week.

MSCI’s largest Asia-Pacific stock index .MIAP00000PUS was up 0.7% to a two-and-a-half-week high, with Hong Kong .HSI up 0.8% and Japan’s Nikkei .N225 adding 0.5%. Chinese markets remained closed on a public holiday. [.T]

U.S. stimulus hopes still boiled in the background after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke by phone for about an hour and said they were preparing to speak again on Tuesday .

“If we see some form of stimulus materialize, I think the market will take it in a positive light,” said Tai Hui, chief Asian market strategist at JP Morgan Asset Management.

CENTRAL FOCUS

S&P 500 ESc1 futures were a bit weaker after the best daily gain on the S&P 500 .SPX in a month overnight, as optimism hit gold and other safe-haven assets.

Spot gold XAU = fell 0.1% to $ 1,911 an ounce, after hitting a two-week high on Monday, and US GCv1 gold futures fell 0.21% .

Bond markets also joined in, as a sharp sell-off in US bonds continued Monday in Asia and Europe.

Benchmark 10-year German government bond yields, which move inversely to price, hit their highest level in more than a week. [GVD/EUR]Japanese 2JGBv1 government bond futures fell to a one-month low in the steepest decline in more than five weeks and South Korean yields surged. [JP/T] However, analysts said sales in other Asian markets were more subdued than in the U.S. market, as regional investors began to assess the victory of Democratic presidential candidate Joe Biden in the November 3 election.

European Central Bank President Christine Lagarde and U.S. Federal Reserve Chief Jerome Powell were also due to speak later today, giving traders yet another reason to be patient.

“The massive sell-off in US yields is driven more by Trump being released from the hospital,” DBS rate strategist Duncan Tan in Singapore said. “It reduces some of the uncertainties surrounding the electoral process. In the short term, at the very least, it removes the extreme risk of having to question whether Trump or Biden is incapable of running in the election. US 10-year yields US10YT = RR were flat at 0.77%, while in currency markets the dollar was under pressure from most other majors except the safe haven Japanese yen. [FRX/]

The dollar gained against the yen to hit 105.62 yen JPY =, not far from its highest level in three weeks.

The Australian dollar gained briefly after the Reserve Bank of Australia left rates unchanged, as expected, but then retreated, and the potential for further monetary easing capped the gains.

Oil jumped more than 5% overnight and rose further in Asia, supported by news from Trump and a supply squeeze as a strike closed six Norwegian offshore oil and gas fields. [O/R]

U.S. CLc1 crude last stood at $ 39.15 a barrel, up 0.2%, and Brent LCOc1 crude rose 0.1% to $ 41.35.

Reporting by Marc Jones; Edited by Alexander Smith

Original © Thomson Reuters

Originally posted 2020-10-06 02:46:11.

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