(Bloomberg) – US index futures rose along with equities in Europe as China resurged hopes for progress in trade talks with America this week despite numerous potential headwinds. Gold slipped with government bonds.
Contracts on the S & P 500, Dow Jones and Nasdaq 100 indices increased earnings after it was reported that China is still open to US partial trade. In Europe, technology companies and automakers have a broad base ahead of the Stoxx Europe 600 Index. The benchmark equity indicators had previously fallen across Asia, with the exception of those in Shanghai and Mumbai. The dollar weakened after two days of profit. Crude oil rose.
Washington is expected to resume high-level trade talks between the US and China on Thursday, even though relations between the two countries have deteriorated. Although a far-flung agreement appears unlikely, China has signaled that it is open to limited business, unless imposed by President Donald Trump. In return, Beijing would offer concessions such as the purchase of agricultural products without addressing key issues.
The Trump government imposed a visa ban on Chinese officials on Tuesday and filed a blacklist of Chinese technology companies. Bloomberg also reported that the White House is driving the discussion on restricting US government pension investment in China.
The recent flare-up between the US and China overshadowed the comments of US Federal Reserve Chairman Jerome Powell, who said the central bank would resume purchases of government bonds securities to avoid a recurrence of the recent turmoil on the money markets at the same time to indicate the possibility of further interest rate cuts. The Fed's latest Interest Rate Conference minutes will be released this evening, providing further insights into policymakers' thinking ahead of their next session later this month.
"Measured by the US onslaught on Chinese companies, trade negotiations are currently less constructive than thought, increasing the risks to global growth," said Nema Ramkhelawan-Bhana, economist at FirstRand Bank in Johannesburg, in a note to the customers. "In the absence of fiscal expansion, countries will postpone central banks to cushion the blow by making further political arrangements."
Elsewhere, the yuan rallied, supported by trade optimism and a stronger than expected determination of the daily reference valuation. West Texas crude rose over $ 53 a barrel. The Turkish lira staggered as the country's military began to cross the border into Syria, as previously warned.
There are some important events coming up this week:
Wednesday, minutes The report on the last meeting of the European Central Bank on Thursday is due to be released. Chinese President Xi Jinping will meet Indian Prime Minister Narendra Modi on an informal summit on Friday and Saturday The US announces a key measure of inflation on Thursday.
The main movements in the markets:
The Stoxx Europe 600 Index gained 0.4% at 7:08 am New York time The S & P 500 Index rose 0.8%. The British FTSE 100 Index rose 0.5%. The MSCI All-Country World Index barely changed. The MSCI Emerging Market Index fell 0.3%.
The Bloomberg Dollar Spot Index fell 0.1%. The Euro rose 0.2% to 1.0983 USD.
The British pound climbed 0.1% to $ 1.2227.
The Japanese yen appreciated 0.3% to $ 107.36 per dollar from 1.55% onwards. Two-year government bond yields rose by two basis points to 1.44%. Britain's 10-year yield rose three basis points to 0.448%. Germany's 10-year yield climbed three basis points to -0.57%. Japan's 10-year yield rose less than one basis point to -0.2%.
West Texas Intermediate crude rose 0.9% to $ 53.10 a barrel. Gold fell 0.2% to $ 1,502.54 per ounce. Iron ore fell 4% to $ 86.10 a tonne.
– With support from Cormac Mullen and Adam Haigh.
Contacting the reporter on this story: Robert Brand in Cape Town at [email protected]
Contacting editors responsible for this story: Christopher Anstey at [email protected], Todd White
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