European stocks gain on vaccine hope; dollar slumps
European stocks climbed as authorities said the rollout of a COVID vaccine would begin before the end of the month, potentially giving a boost to the region’s battered economies.
The Stoxx Europe 600 Index edged higher, pulled up by cyclical shares such as miners and retailers. Sentiment was also buoyed after European Union leaders cleared the bloc’s 1.8 trillion-euro (US$2.2 trillion) stimulus package on Wednesday. The pound climbed as officials cautiously predicted a Brexit deal within days.
S&P 500 futures gained, with Congressional leaders in the U.S. still haggling over the final details of nearly US$900 billion in coronavirus aid. Earlier, the Federal Reserve disappointed some traders who expected changes to its bond buying program, with the yield on 10-year Treasuries climbing above 0.9 per cent. The dollar slumped.
Elsewhere, Bitcoin breached US$23,000 for the first time. Oil held gains in the wake of a surprise decline in U.S. crude inventories. Stocks saw modest advances across Asia.
Now that European leaders have cleared the path for a much-needed regional aid package, focus turns back to the U.S. after months of deadlock amid signs the economic recovery there is faltering. Lawmakers in Washington are rushing to finalize the deal in time to attach it to crucial government spending legislation ahead of a vote later this week.
“If the session ahead is another in which the market contemplates U.S. fiscal stimulus, without much material Brexit news, we may well see more of the cyclical trade,” according to Mizuho International’s multi-asset strategy team led by Peter Chatwell.
Meanwhile, Emmanuel Macron’s office said he’d tested positive for the virus. The French president, 42, will self-isolate during seven days, while continuing to work, his office said. The number of coronavirus deaths reached another daily record in the U.S., while the first known allergic reaction to the Pfizer Inc. vaccine was reported in Alaska as some snarls began to emerge in the effort to send the shots across the country.
The EU will roll out vaccinations across the region starting from Dec. 27, Commission President Ursula von der Leyen wrote in a tweet.
These are some of the main moves in markets:
- Futures on the S&P 500 Index gained 0.6 per cent as of 11:33 a.m. London time.
- The Stoxx Europe 600 Index increased 0.5 per cent.
- The MSCI Asia Pacific Index advanced 0.7 per cent.
- The MSCI Emerging Market Index climbed 0.5 per cent.
- The Bloomberg Dollar Spot Index fell 0.4 per cent.
- The euro increased 0.3 per cent to US$1.2235.
- The British pound jumped 0.8 per cent to US$1.3615.
- The onshore yuan was little changed at 6.534 per dollar.
- The Japanese yen strengthened 0.4 per cent to 103.09 per dollar.
- The yield on 10-year Treasuries jumped one basis point to 0.92 per cent.
- The yield on two-year Treasuries gained less than one basis point to 0.12 per cent.
- Germany’s 10-year yield fell one basis point to -0.58 per cent.
- Japan’s 10-year yield climbed less than one basis point to 0.011 per cent.
- Britain’s 10-year yield gained one basis point to 0.277 per cent.
- West Texas Intermediate crude increased 0.4 per cent to US$48.01 a barrel.
- Brent crude climbed 0.4 per cent to US$51.26 a barrel.
- Gold strengthened 0.7 per cent to US$1,877.87 an ounce.
Source: BNN Bloomberg