Global stocks, oil and euro gain despite surging coronavirus cases
Send a link to a friend
[June 26, 2020]
By Elizabeth Howcroft
LONDON (Reuters) - Markets showed signs of
optimism on Friday, with European shares gaining for a second
consecutive day, oil prices rising and the dollar falling, despite a
record number of new COVID-19 infections in the United States.
Coronavirus cases rose across the United States by at least 39,818 on
Thursday, the largest one-day increase yet. The governor of Texas
temporarily halted the state's reopening on Thursday as infections and
But European shares were undeterred, with the Stoxx 600 up 1.2% at 1030
GMT, erasing some losses from earlier in the week <.STOXX>. The index is
set to end the week down 0.5%, its smallest weekly change in five
months. London's FTSE 100 was up around 1.5% <.FTSE>.
The MSCI world equity index, which tracks shares in 49 countries, was up
0.4%, extending gains from late on Thursday.
"Even though we continue to see some pretty scary virus numbers coming
out of the U.S., it's not really dented sentiment – not to any sustained
degree at least," said Timothy Graf, head of EMEA macro strategy at
State Street Global Advisors.
Graf said that recent downward corrections of market optimism have had
The possibility of a second coronavirus wave and renewed lockdowns has
limited market impact because if lockdown measures resume then markets
expect this to raise the likelihood of more fiscal support for
economies, he said.
"There is a disconnect between what you feel should be the case looking
at virus numbers and equities and riskier currencies holding up
relatively well and volatility receding, but at the same time we've
never seen a policy response like this, not in the last 80 years at
least," Graf said.
Having risen between 0500 and 0700 GMT, the dollar fell in London,
reaching 97.325 against a basket of currencies by 1030 GMT and on track
to end the week down around 0.4% <=USD>.
The riskier New Zealand dollar was up 0.2% <NZD=D3>, having spent most
of June unchanged from its level before the coronavirus crisis for
markets peaked in March.
The euro gained versus the U.S. dollar and is on track for its biggest
weekly rise in three weeks after the European Central Bank reaffirmed
its dovish stance in the minutes of its policy meeting.
[to top of second column]
The German share price index DAX graph is pictured at the stock
exchange in Frankfurt, Germany, June 25, 2020. REUTERS/Staff
The euro zone is "probably past" the worst of the economic crisis
caused by the pandemic, European Central Bank President Christine
Lagarde said on Friday, while urging authorities to prepare for a
possible second wave.
Oil prices also rose, extending gains on optimism about a recovery
in fuel demand worldwide, despite signs of a revival in U.S. crude
U.S. West Texas Intermediate crude <CLc1> futures gained 20 cents,
or 0.5%, to $38.92. Brent crude <LCOc1> futures rose 31 cents, or
0.8%, to $41.36.
Demand for safe euro zone government debt was little changed, with
Germany's 10-year Bund yield edging up from recent one-month lows at
The yield on benchmark 10-year Treasuries <US10YT=RR> was steady at
0.6725%. Gold <XAU=> edged up slightly to $1,763.65 an ounce.
S&P 500 futures pointed to a slightly bullish U.S. stock market
open, up 1% <ESc1>.
Investors have poured $2.6 billion into Treasury inflation-protected
securities (TIPS) in the week to Wednesday, Bank of America said,
the largest amount ever.
Credit Suisse changed its position on global equities to "neutral",
from "overweight", saying that it was taking profits after the
recent rally, but kept its overweight positions in credit markets.
"The upcoming earnings season, a recent uptick in coronavirus
infection numbers and political developments in the USA create a
challenging backdrop for financial markets going into the summer,"
said Michael Strobaek, Credit Suisse's chief investment officer.
(Reporting by Elizabeth Howcroft; editing by Mark Heinrich, Larry
[© 2020 Thomson Reuters. All rights
Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.