U.S. stocks advanced; Shares in Hong Kong leaped the most since 2018; Euro to Dollar gained 

U.S. stocks advanced as a broad easing of risks across the globe gave investors a reprieve. Treasuries and the dollar declined.

The S&P 500 rebounded from Tuesday’s losses along with European and Asian shares as political tensions appeared to subside in Hong Kong and the U.K., while indicators in China and Europe hinted economic growth may not be as bad as some expected. The 10-year Treasury yield gained, while the dollar fell for a second day.

Shares in Hong Kong leaped the most since 2018 after embattled leader Carrie Lam said she formally withdrew legislation to allow extraditions to China, the detonator for three months of often-violent protests. In the U.K., the pound surged after Parliament took a crucial first step to block a no-deal Brexit. The euro advanced after purchasing managers indexes for the region beat expectations, while the onshore Chinese yuan gained after a stronger-than-forecast currency fixing.

Traders are rushing back into riskier assets as event risks seem to be receding, from a possible Chinese crackdown in Hong Kong to confrontations between the European Union and two of its biggest members. At the same time, investors remain on the alert for any news on China-U.S. trade talks, with officials from both countries struggling to agree on the next step after Washington rejected Beijing’s request to delay tariffs that took effect over the weekend.

Elsewhere, oil futures climbed. The Canadian dollar extended gains after the Bank of Canada left interest rates unchanged. In the U.S., with Florida orange groves seemingly escaping major damage from Hurricane Dorian, concern now turns to soy, corn and cotton fields as well as livestock in Georgia and the Carolinas as the storm churns northward.

Here are some key events coming up:

• Bank of England Governor Mark Carney speaks before Treasury Committee on Wednesday alongside colleagues Andy Haldane, Jonathan Haskel and Gertjan Vlieghe, on the bank’s August Inflation Report; he’ll then appear alone to discuss the U.K.’s economic relationship with the EU.
• Fed speakers this week include New York Fed’s John Williams on Wednesday and Fed chair Jerome Powell on Friday.
• The U.S. jobs report on Friday is projected to show the widely watched nonfarm payrolls rose by 160,000 in August, versus 164,000 the month prior. Estimates are for unemployment to be steady at 3.7% and the average hourly earnings rate of increase to slow to 3.0%.

These are the main moves in markets:

Stocks

• The S&P 500 Index rose 0.7% as of 10:04 a.m. New York time.
• The Stoxx Europe 600 Index advanced 0.9%
• The U.K.’s FTSE 100 Index climbed 0.5%.
• The MSCI All-Country World Index increased 0.5%.
• The MSCI Emerging Market Index jumped 1.6%

Currencies

• The Bloomberg Dollar Spot Index sank 0.4%.
• The euro gained 0.4% to $1.1015.
• The British pound increased 0.9% to $1.2186.
• The Japanese yen weakened 0.3% to 106.30 per dollar.

Bonds

• The yield on 10-year Treasuries climbed four basis points to 1.50%.
• The yield on two-year Treasuries increased one basis point to 1.46%.
• Britain’s 10-year yield jumped 10 basis points to 0.510%.
• Germany’s 10-year yield climbed six basis points to -0.65%.

Commodities

• West Texas Intermediate crude advanced 2.8% to $55.45 a barrel.
• Gold decreased 0.2% to $1,552.59 an ounce.
• Iron ore gained 2.8% to $88.15 per metric ton.

Source: Bloomberg

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