Investing.com – The pound hung onto gains against the dollar on continued hopes over a Brexit deal despite some experts suggesting the optimism could be misplaced amid fresh U.K.-EU trade talks that got underway Tuesday.

GBP/USD rose 0.25% to $1.2877, after rising above $1.29 intraday.

The strong start to the week for sterling may hint at progress over a post-Brexit deal in the wake of cautiously optimistic comments from both the U.K. and EU, but “nothing has changed,” Commerzbank (DE:CBKG) said.  The FX market, however, “seems to be taking a more optimistic view,” at the “risk of bitter disappointment if the negotiations this week do not result in any progress,” it added.

The U.K.-EU talks come in the midst of souring U.K.-EU relations after British Prime Minister Boris Johnson proceeded with an internal market bill that undermines the Brexit withdrawal agreement.

In an attempt to extend an olive branch, the U.K. has submitted new draft negotiating papers to find a way past the key sticking issues including fisheries, the “level playing field,” and social security coordination, according to media reports.

Brexit talks aside, the Commerzbank also warned that upside for the sterling would likely be limited by the second wave of the virus that has forced the U.K. government to renew restrictions that could be be “stepped up” to curb the outbreak.

Further restrictions would hurt the economic recovery and likely prompt the Bank of England to take a deeper look at negative rates despite Bank of England member David Ramsden pushing back on the idea on Monday.

“If we do not see some relief on the corona front in the UK soon speculation about further expansionary measures and negative interest rates might increase again and put pressure on sterling,” Commerzbank bank said.

Investing.com – The dollar was down on Friday morning in Asia, reversing earlier gains despite the lingering doubts over the latest U.S. stimulus packages. Meanwhile, the Chinese yuan was boosted by the inclusion of Chinese debt to FTSE Russell’s World Government Bond (WGBI) index.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.03% to 94.365 by 9:52 PM ET (1:52 AM GMT).

U.S. markets rose on Thursday over increased hopes that the U.S. Congress would break a months-long impasse to pass the latest COVID-19 stimulus measures. Democrats in the U.S. House of Representatives announced that they are working on a $2.2 trillion coronavirus stimulus package that could be voted on next week. News that House of Representatives Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin could resume stalled stimulus talks.

But some investors remained skeptical on whether Congress could overcome the impasse. U.S. President Donald Trump’s refusal to commit to a peaceful transfer of power should he fail to be re-elected in November’s presidential elections, increasing the chances of a disputed election.

Meanwhile, data released on Thursday showed that the number of Americans claiming unemployment over the past week increased to 870,000, indicating a slowdown in the economic recovery and highlighting the pressing need for Congress to pass the support measures.

“We have seen lately the dollar gaining as risk assets are sold off. We need to see whether this will continue beyond the end of this month,” Daiwa Securities senior strategist Yukio Ishizuki told Reuters.

The USD/JPY pair inched up 0.07% to 105.47.

The USD/CNY pair was down 0.22% to 6.8123. The offshore yuan reversed its decline over the past week after FTSE Russell’s announcement that Chinese government bonds will be added to the WGBI index starting in 2021.

“Foreign ownership of Chinese government bonds has picked up steadily. The inclusion in the WGBI benchmark will prompt additional foreign flows into the Chinese bond market and support the yuan,” Commonwealth Bank China economist Kevin Xie told Reuters.

The AUD/USD pair edged up 0.14% to 0.7055 and the NZD/USD pair inched up 0.02% to 0.6551.

The GBP/USD pair inched up 0.04% to 1.2754. The pound was supported by U.K. Chancellor of the Exchequer Rishi Sunak’s ‘winter plan’ proving limited support for workers as the country continues to battle against a second wave of COVID-19.

NEW YORK (Reuters) – Asian stocks opened lower on Thursday, tracking a sharply lower Wall Street session amid fresh concerns that the global economic recovery is running out of steam.

U.S. stocks fell on Wednesday after data showed business activity slowed in September, with gains at factories more than offset by a retreat at services industries.

Investors now await weekly data due later on Thursday, which is expected to show U.S. jobless claims fell slightly but remained elevated, indicating the world’s largest economy is still far from recovering.

The data comes after a Federal Reserve official said it will be hard to boost employment without further government stimulus.

However, with congress locked in a stalemate, analysts see immediate fiscal support as unlikely.

“Equity sentiment remained positive in Europe but quickly soured in the U.S. as Fed speakers urged further fiscal support for the economy,” Westpac Institutional Bank analysts said in a note.

In Asia, E-mini futures for the S&P 500 fell 0.11%, Australia’s S&P/ASX 200 (AXJO) lost 1.6% and Japan’s Nikkei 225 (N225) declined 0.56%. Hong Kong’s Hang Seng index futures (HSI) (HSIc1) dropped 0.92%.

Additionally, a second wave of coronavirus infections in Europe threatened the economic recovery in that region pushing equities lower and propping up the safe-haven the safe haven dollar.

On Wednesday, the Dow Jones Industrial Average (DJI) fell 1.92%, the S&P 500 (SPX) lost 2.37% and the Nasdaq Composite (IXIC) dropped 3.02%.

MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.04% higher, while Japan’s Nikkei (N225) %.

Strength in the dollar, which rallied to a two-month high on Wednesday, weighed on gold prices.

The dollar index (=USD) rose 0.393%, while spot gold dropped 0.3% to a two-month low at $1,858.39 an ounce.

Oil prices advanced slightly after reports that inventories were down across the U.S. but gains were muted by uncertainty about demand going forward as travel remains limited due to the pandemic.

Brent crude (LCOc1) rose 5 cents to settle at $41.77 a barrel. U.S. West Texas Intermediate crude (CLc1) gained 13 cents to settle at $39.93 a barrel.

The yield on Treasuries Benchmark 10-year (US10YT=RR) rose 1.3 basis points to 0.677% on Wednesday while the 30-year bond yield (US30YT=RR) rose 1.2 basis points to 1.427%.

Investing.com – European stock markets are seen opening higher Tuesday, with expectation growing ahead of Thursday’s policy meeting of the European Central Bank. However, investors will be keeping a wary eye on the U.S. tech sector as Wall Street returns from holiday.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France climbed 0.3%, while the FTSE 100 futures contract in the U.K. rose 0.4%. 

“The eurozone is still on track to see a very strong third-quarter growth figure. However, recent indicators signal some deceleration. Inflation is undershooting expectations, paving the way for an extension to the Pandemic Emergency Purchase Programme,” said ING’s Peter Vanden Houte, in a research note.

The European Central Bank meets on Thursday, and expectation is growing that it may be forced into action following the Federal Reserve’s change in inflation tolerance at its last meeting at the end of August.

“The ECB is under pressure to prevent further strengthening of the EUR with core inflation already at record-lows. We expect [President Christine] Lagarde to bring promises of more policy easing to next week’s ECB meeting, if not concrete easing measures,” analysts at Nordea said, in a research note published late last week.

The eurozone economy is expected to rebound in the third quarter from a record=breaking drop in the three months through June. France’s official statistics agency confirmed earlier Tuesday its forecast of a 9% drop in gross domestic product in 2020 due to the coronavirus pandemic. Overall though, second-quarter GDP numbers have been close to the ECB’s baseline forecast, board member Isabel Schnabel said last week.

Earlier Tuesday, Japan’s economy, the world’s third-largest, shrank an annualised 28.1% in the second quarter, more than a preliminary reading of 27.8%.

Investors will also be keeping a wary eye on the return of the U.S. market after the Labor Day holiday. The dominant tech sector, which has seen mammoth gains throughout the Covid-19 pandemic, hit the skids late last week due to doubts over positioning and stretched valuations.

Oil prices dropped Tuesday, with the U.S. WTI contract suffering the bulk of the selling after the U.S. Labor Day long weekend, which marks the end of the peak U.S. driving season.

U.S. crude futures traded 1.7% lower at $39.09 a barrel, while the international benchmark Brent contract fell 0.1% to $42.00. 

Elsewhere, gold futures rose 0.3% to $1,940.30/oz, while EUR/USD traded 0.1% higher at $1.1825.

SYDNEY (Reuters) – Asian shares were on the defensive on Monday as investors grappled with sky-high valuations against the backdrop of a global economy in the grip of a deep coronavirus-induced recession while oil prices dropped sharply.

Chinese stocks started lower while shares of Hong Kong-listed Semiconductor Manufacturing International Corp (SMIC) plunged to the lowest since June 16 on fears the firm could be added to a U.S. trade blacklist.

China’s blue-chip index slipped 0.5% and Hong Kong’s Hang Seng eased 0.2%.

Japan’s Nikkei fell 0.4% with SoftBank coming under heavy selling following media reports it has spent at least $4 billion buying call options on listed U.S. technology stocks.

Australian shares, which had opened in the red, reversed losses to edge up 0.1% led by miners, while South Korea added 0.4%.

That left MSCI’s broadest index of Asia-Pacific shares outside Japan barely changed after two straight days of losses toppled it from a 2-1/2-year peak last week.

World shares hit a record high last week as central bank stimulus drove asset valuations to heady levels. The rally has since cooled as tech stocks sold off while worries over patchy economic recovery dogged investors.

The immediate focus on the day will be on China’s exports and imports data for August, due later in the morning.

China’s exports are expected to have posted a second month of solid gains in August as more of its trading partners relaxed coronavirus lockdowns and reopened their economies, a Reuters poll showed.

U.S. stock futures opened in the red, with E-minis for the S&P 500 down 0.3% and Nasdaq futures sliding 1.1%. U.S. markets will be closed on Monday for Labor Day.

Nasdaq futures were dragged lower by the exclusion of Tesla (NASDAQ:TSLA) from a group of companies that were being added to the S&P 500.

Analysts at Jefferies (NYSE:JEF) expect the equities market correction to extend further.

“Our risk indices have begun to turn from their euphoria highs,” Jefferies said.

“It is not unthinkable that global equities are set to churn in a range for a while as some of the orphan sectors/countries are refranchised while the richly valued sectors pause or unwind,” it added.

“On the balance of probabilities, last week’s correction has further room to go.”

Jefferies said it was switching its weighting on MSCI All World index to “tactically bearish” in the short term.

It noted that a gauge of volatility has nudged higher in the past three months alongside a steepening in U.S. 10-year to 5-year Treasury yield curve as well as the 30-year to 5-year curve.

“We wonder how much moves in both would upset the equity market,” Jefferries said.

Later this week, investors will look for data on U.S. inflation with both producer and consumer prices expected to remain mostly steady.

“With slack in the labor market and broader economy to remain for years, it’s hard to see where sustainably higher inflation will come from,” Brown Brothers Harriman said in a note.

“That said, the bottom line is that U.S. rates will stay lower for longer. Full stop.”

In commodities, oil prices dropped more than $1 a barrel, hitting their lowest since July, after Saudi Arabia made the deepest monthly price cuts for supply to Asia in five months.

Fading optimism about demand recovery amid the coronavirus pandemic also weighed. U.S. crude fell 1.3% to $39.24 a barrel. Brent crude skidded 1.1% to $42.16.

Policy meetings at the Bank of Canada on Wednesday and the European Central Bank (ECB) the following day are also on investors’ radar, with both expected to keep policy steady.

Action in the forex market was muted.

In currencies, the dollar was flat against the yen at 106.27 ahead of a heavy week of macroeconomic data with figures on household spending, current account and gross domestic product due on Tuesday.

The euro held at $1.1838 while the British pound was a 0.3% weaker at $1.3241 ahead of a new round of Brexit talks with the European Union on Monday.

SYDNEY/NEW YORK (Reuters) – Asian stocks dithered on Wednesday as an increase in new coronavirus cases in some parts of the world cast doubts over the economic recovery while oil prices eased on oversupply fears.

MSCI’s broadest index of Asia-Pacific shares outside Japan were a tad lower after hitting a 4-1/2 month high just on Tuesday.

Chinese shares flickered between green and red. Australian shares were down 0.4% as were indexes for New Zealand and South Korea. Japan’s Nikkei was off 0.1% and Hong Kong’s Hang Seng index was slightly firmer.

E-mini futures for the S&P 500 added 0.18%.

Overnight, U.S. stocks fell, halting a five-day winning streak by the benchmark S&P 500 index, its longest this year and driven by better-than-expected economic data.

Following the recent rally, the declines looked like a consolidation, with the markets largely in “wait and see mode” ahead of the upcoming earnings session, said NAB economist Tapas Strickland.

Second-quarter earnings season will begin in earnest from next week.

“It will be important to watch the number of U.S. deaths in coming weeks and whether greater questions will be asked about the extent of necessary restrictions,” Strickland added.

California reported more than 10,000 coronavirus cases on Tuesday, a record rise for a single day that also surpassed the number of contact tracers recently trained by the state to detect and prevent potential outbreaks.

Coronavirus cases were also on the rise in the Australian state of Victoria, which led to lockdown measures being reimposed in Melbourne, the country’s second-biggest city.

“The second wave of infection will see Victorian economic activity fall sharply and it will continue to lag the rest of Australia,” said NAB economist Kaixin Owyong.

Victoria makes up around a quarter of Australian economic activity, she said.

Citi analysts predicted global equities would hang around current levels in twelve months’ time.

“We expect bullish and bearish forces to cancel each-other out,” they said in a note. “We would not chase markets higher from current levels, but would prefer to wait for the next dip.”

Citi has “overweight” positions on U.S. and Emerging Markets equities.

Most major currencies were trapped in a range.

The U.S. dollar was 0.15% higher on the Japanese yen at 107.65.

The risk sensitive Australian and New Zealand dollars were a shade weaker at $0.6940 and $0.6544, respectively.

The euro was barely changed at $1.1273.

In commodities, gold hovered near a recent 8-1/2 year peak as investors preferred safe-haven assets. Spot gold was last a shade weaker after two straight days of gains at 1,792.5 per ounce.

Brent crude futures fell 8 cents, or 0.2%, to $43 a barrel. U.S. West Texas Intermediate (WTI) crude futures slipped 6 cents, or 0.15%, to $40.56 a barrel.

(source) Investing.com – European stock markets are set to open higher Monday amid hopes of a global economic recovery aided by more stimulus, but concerns remain over the increasing number of new coronavirus cases.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 1.4% higher. CAC 40 futures in France were up 1.9%, while the FTSE 100 futures contract in the U.K. rose 1%.

Economic data of late has tended to point to a reasonably prompt economic recovery around the world. The U.S. recorded last week the addition of 4.8 million jobs in June, much more than expected, while PMI data in China and throughout Europe has tended to suggest renewed confidence of a brisk pickup in activity.

Additionally, the U.S. Congress is set to resume talks on the next stimulus bill later this month, while Germany, Europe’s economic powerhouse, will be keen to cement the structure of a Covid-19 recovery fund as it now has the six-month rotating presidency of the European Union.

A meeting of euro area finance ministers on Thursday could be telling before a looming July 17-18 summit – crucial to securing agreement on a recovery fund.

The likely need for additional stimulus grows as the number of Covid-19 cases shows no signs of slowing down. The World Health Organization reported the highest number of cases over a 24-hour period, with the U.S. reporting a spike in cases over the long holiday weekend.

Turning back to Europe, Swiss manufacturer Geberit (SIX:GEBN)said Monday that its sales fell 9.8% in the first half of the year due to the impact of the coronavirus pandemic.

German factory orders continued the recent data trend of suggesting a recovery, jumping 10.4% in May, admittedly slightly below estimates, after falling by a revised 26.2% the previous month.

Later in the session, the June construction PMI release from the U.K. will be studied, as will eurozone retail sales for May.

Oil prices traded in a mixed fashion Monday, as the continued growth of new coronavirus cases in the U.S. weighed on the American benchmark, WTI futures, while the global benchmark Brent futures posted small gains on falling supply.

Coronavirus cases in the U.S. increased by almost 56,000 on Sunday, according to Johns Hopkins University. raising concerns that this jump could hit oil demand in the United States.

Elsewhere, production by the Organization of the Petroleum Exporting Countries and allies, including Russia, has fallen to its lowest in decades, as the group cuts output by a record 9.7 million barrels per day for a third month in July. 

At 2:05 AM ET, U.S. crude futures traded 0.2% lower at $40.58 a barrel. The international benchmark Brent contract rose 0.9% to $43.19.

Elsewhere, gold futures fell 0.4% to $1,782.95/oz, while EUR/USD traded at 1.1290, up 0.4% on the day.

SYDNEY (Reuters) – Asian shares scaled four-month peaks on Monday as investors counted on super-cheap liquidity and fiscal stimulus to sustain the global economic recovery, even as surging coronavirus cases delayed re-openings across the United States.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1% to its highest since February.

Eyes were on Chinese blue chips, which jumped 3%, on top of a 7% gain last week, to their loftiest level in five years. Even Japan’s Nikkei, which has lagged with a soft domestic economy, managed a rise of 1.3%.

“We think there is a case for raising tactical allocation on Asian equities in the context of global equity portfolios,” wrote analysts at Nomura in a note.

“We see a number of catalysts that could drive Asia ex-Japan (AeJ) equities’ outperformance over U.S. equities in the near term,” they added. “Better COVID-19 trends and mobility data in economies/markets that dominate the AeJ index should translate into faster economic recovery vs the U.S.”

E-Mini futures for the S&P 500 also firmed 0.8%, while EUROSTOXX 50 futures added 1.8% and FTSE futures 1.5%.

Most markets had gained ground last week as a raft of economic data from June beat expectations, though the resurgence of coronavirus cases in the United States is clouding the future.

In the first four days of July alone, 15 states have reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed about 130,000, according to a Reuters tally.

“It is very clear that the U.S. never got the COVID outbreak under control the way that other countries did. By reopening the economy too soon, we have seen a frightening increase in the pace of new cases,” said Robert Rennie, head of financial market strategy at Westpac.

Analysts estimate that reopenings impacting 40% of the U.S. population have now been wound back.

“So markets will have to climb a wall of worry in July as economic activity likely softens from the V-shaped recovery seen over recent months,” warned Rennie. “We must remember too that U.S. and China relations are deteriorating noticeably.”

Two U.S. aircraft carriers conducted exercises in the disputed South China Sea on Saturday, the U.S. Navy said, as China also carried out military drills that have been criticised by the Pentagon and neighbouring states.

The risks, combined with unceasing stimulus from central banks, have kept sovereign bonds supported in the face of better economic data, with U.S. 10-year yields holding at 0.67% and well off the June top of 0.959%.

Analysts at Citi estimate global central banks are likely to buy $6 trillion of financial assets over the next 12 months, more than twice the previous peak.

Major currencies have been largely range bound with the dollar index at 97.189 having spent an entire month in a snug band of 95.714 to 97.808.

The dollar was a shade firmer on the yen at 107.72 on Monday, while the euro edged up to $1.1271.

In commodity markets, gold has benefited from super-low interest rates across the globe as negative real yields for many bonds make the non-interest paying metal more attractive.

Spot gold traded at $1,772 per ounce just off last week’s peak of $1,788.96. [GOL/]

Oil prices were mixed in early trade with Brent crude futures up 19 cents at $42.99 a barrel, while U.S. crude eased 23 cents to $40.42 amid worries the surge in U.S. coronavirus cases would curb fuel demand. 

NEW YORK (Reuters) – Asian stocks were likely to track a firmer Wall Street session on Friday after strong U.S. jobs data although growing Sino-U.S. tensions and a worrying surge in coronavirus cases is likely to cap gains.

{{178|Japan’s NiNikkei 225 futures rose 0.45% and Australia’s S&P/ASX 200 futures climbed 0.58%.

E-mini futures for the S&P 500 rose 0.14%.

“While June data reflected a big improvement in the U.S. labor market, the recent sharp acceleration in new virus cases plus the prospect of an end to unemployment benefits by the end of July are two big layers of uncertainty,” said NAB Markets analyst Rodrigo Catril, adding that the uptick in U.S. cases could mean extended headwinds for the labor market.

Wall Street ended Thursday higher following a record increase in payrolls and a decline in unemployment. U.S. markets are closed on Friday in observance of Independence Day.

However, investor focus is shifting to worsening strains between China and the United States.

More than 75 U.S. members of congress sent a letter to the President Donald Trump urging him to take make a formal determination on whether China’s treatment of Muslim Uighurs and other groups constitutes an atrocity.

The U.S. State Department also warned American companies including Amazon.com Inc (NASDAQ:AMZN), Walmart (NYSE:WMT) Inc and Apple Inc (NASDAQ:AAPL) to check their supply chains and ensure they are not doing business with entities linked to alleged human rights abuses against Uighurs in China’s Xinjiang province.

Separately, Congress passed legislation seeking to punish banks that do business with Chinese officials who implement Beijing’s draconian new national security law on Hong Kong.

MSCI’s gauge of stocks across the globe gained 0.92%. The Dow Jones Industrial Average rose 0.36%, the S&P 500 gained 0.45% and the Nasdaq Composite added 0.52%.

The positive economic data also pushed oil prices higher.

Brent crude futures settled at $43.14 a barrel, rising $1.11, or 2.6%. U.S. West Texas Intermediate (WTI) crude futures settled at $40.65 a barrel, up 83 cents, or 2.1%.

Investors still embraced the safe-haven dollar and gold, which usually rise when risk appetite declines, as an acceleration in new COVID-19 cases across the country prompted fresh restrictions.

The dollar index rose 0.058%, with the euro up 0.01% to $1.1239.

The Japanese yen weakened 0.02% versus the greenback at 107.53 per dollar, while sterling last traded at $1.2468, up 0.02% on the day.

Spot gold rose 0.4% to $1,777.04 per ounce

U.S. Treasury yields ended the day lower ahead of the July 4 long weekend, with the benchmark 10-year yield fell 1.1 basis points at 0.6709%.

NEW YORK (Reuters) – Asian stocks were set to track Wall Street gains on Thursday as investors cheered signs the global economy was emerging from its coronavirus hibernation although trade is likely to be choppy as fresh concerns about Hong Kong keep investors cautious.

Also adding to market apprehension is June U.S. employment data due later in the day, which will show if the world’s largest economy can sustain its fragile recovery as new COVID-19 cases accelerate in several southern states.

E-mini futures for the S&P 500 edged 0.06% higher, while Australian S&P/ASX 200 futures climbed 0.71% and {{178|Japan’s NiNikkei 225 futures rose 0.4%.

Economists polled by Reuters expect private employers to show 2.9 new million new jobs June, which would follow a surprise increase in May. Casting some doubt over that projection, however, was a smaller-than-expected increase in jobs seen in the ADP report on Wednesday.

“The weaker than expected ADP report suggests some downside risk to consensus,” said Joseph Capurso, head of international economics at Commonwealth Bank of Australia (OTC:CMWAY).

Wall Street shrugged off the miss and ended Wednesday trading higher after key economic indicators showed a rebound in Chinese manufacturing activity as it recovers from the pandemic and sharp declines in European factory activity eased.

In Hong Kong, Hang Seng index futures lost 0.42%. Markets in the Asian financial hub were closed on Wednesday, the same day police in the city arrested more than 300 people protesting sweeping new laws introduced by China to snuff out dissent.

Those developments have raised concerns about China’s already strained relations with its major western trading partners, particularly the United States.

The U.S. House of Representatives passed legislation on Wednesday that would penalize banks doing business with Chinese officials who implement a national security law.

On Wall Street, however, the focus was on positive data. The MSCI’s gauge of stocks across the globe gained 0.45% and the S&P 500 rose 0.50%.

The increase in manufacturing activity also propelled oil prices higher in anticipation of increased demand while gold and the dollar fell as the encouraging reports caused investors to take on more risk.

Brent crude rose 76 cents, or 1.8%, to settle at $42.03 a barrel. U.S. crude rose 55 cents, or 1.4%, to settle at $39.82 a barrel.

The improved sentiment weighed on the safehaven greenback with the dollar indexdown 0.265% and the euro up 0.03% to $1.1253.

The Japanese yen strengthened 0.05% to 107.42 per dollar, while sterling was last trading at $1.2477, up 0.06% on the day.

U.S. gold futures settled 1.1% lower, at $1,779.90.

U.S. Treasuries were weighed by the positive economic data and Federal Reserve meeting minutes, which signaled yield curve control was not coming anytime soon.

The benchmark 10-year yield was last up 2.9 basis points at 0.6824% on Wednesday.