Stocks, US futures climb amid vaccine optimism: markets wrap

Asian stocks rose along with US and European equity futures Tuesday on optimism over the US vaccination drive and ongoing economic support from central banks. Treasuries dipped and the dollar held a drop.

An Asia-Pacific share gauge was set for the best two-day climb since February, helped by a rebound in Chinese technology stocks. JD.com Inc. soared after the e-commerce giant’s results weathered Beijing’s regulatory clampdown. A vow from China’s central bank to boost credit support aided sentiment.


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US and European equity futures edged up after American stocks extended a rebound on full approval for the Pfizer Inc.-BioNTech SE shot. The move proved to be a fillip for the reflation trade as it raises the prospect of more vaccine mandates to underpin economic reopening.

Treasury yields ticked up as traders await the Jackson Hole meeting. Oil was steady following a jump of more than 5%, with risks from Covid-19 still lingering. Gold held near the highest level in over two weeks.

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Markets are in a more optimistic mood compared with last week, when doubts over the pace of the recovery were prevalent. Traders are awaiting Jackson Hole from Thursday for clues on how and when the Federal Reserve plans to scale back stimulus. Threats from the delta virus variant have raised questions about whether officials will hold off from signaling a taper timeline.

“The feeling is Fed chair Jay Powell will err on the side of caution at this week’s Jackson Hole symposium and fail to offer advance notice of tapering its asset purchase program,” Chris Weston, head of research at Pepperstone Financial Pty, wrote in a note. He added some traders may have felt that “now is the time to wade into a bit of cyclicality.”

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The latest US data were mixed: July home sales came in higher than expected while growth at US services and factories slowed to an eight-month low. Traders are also monitoring President Joe Biden’s $4.1 trillion economic agenda, with key votes due in the House of Representatives.

Elsewhere, the Thai baht gained as much as 1% amid optimism that the nation’s virus infections may be peaking.

Here are some events to watch this week:

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  • Bank of Korea policy decision; briefing by Governor Lee Ju-yeol Thursday
  • Fed officials attend the Jackson Hole Economic Policy Symposium from Thursday through Saturday
  • US GDP, initial jobless claims Thursday
  • July US personal income and spending data Friday. Investors will scrutinize the personal consumption expenditures price index, an inflation measure closely watched by the Fed.

For more market analysis read our MLIV blog.

Some of the main moves in markets:

Stocks

  • S&P 500 contracts rose 0.2% as of 7 a.m. in London. The S&P 500 rose 0.9%
  • Nasdaq 100 futures climbed 0.2%. The Nasdaq 100 rose 1.5%
  • Japan’s Topix index gained 1.1%
  • Australia’s S&P/ASX 200 Index added 0.2%
  • South Korea’s Kospi index climbed 1.5%
  • Hong Kong’s Hang Seng Index gained 1.7%
  • China’s Shanghai Composite Index rose 1.1%
  • Euro Stoxx 50 futures gained 0.2%

Currencies

  • The Japanese yen traded at 109.80 per dollar
  • The offshore yuan was at 6.4788 per dollar
  • The Bloomberg Dollar Spot Index dipped
  • The euro was at $1.1743

Bonds

  • The yield on 10-year Treasuries rose two basis points to 1.27%
  • Australia’s 10-year bond yield rose about six basis points to 1.15%

Commodities

  • West Texas Intermediate crude was at $65.90 a barrel, rising 0.4%
  • Gold was at $1 803.47 an ounce, down 0.1%

© 2021 Bloomberg

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