Dollar falls, European shares rise as markets buoyed by vaccine hopes
Send a link to a friend
[August 25, 2020]
By Elizabeth Howcroft
LONDON (Reuters) - European shares opened
higher on Tuesday, with market sentiment propped up by the United States
and China saying they are still committed to their Phase One trade deal,
and some increased optimism around COVID-19 vaccine development.
After the STOXX 600 saw its biggest daily gain in almost two weeks on
Monday, the bullish mood continued throughout the New York and Asian
sessions.
Top U.S. and Chinese officials had a phone call in which they reaffirmed
their commitment to the Phase One trade deal agreed in January, in a
positive sign after months of disputes over the COVID-19 pandemic,
China's national security law and Chinese technology firms.
The news lifted Asian currencies and stocks, with the Chinese yuan
firming slightly overnight.
Market sentiment was also buoyed by a Financial Times report that the
U.S. government was considering fast-tracking an experimental vaccine,
developed by the University of Oxford and AstraZeneca, to make it ready
before the November elections.
A spokeswoman for AstraZeneca denied the company had discussed an
emergency use authorization for its potential vaccine with the U.S.
government.
The director of the Oxford Vaccine Group said on Tuesday that the
vaccine in development could be put before regulators this year.
European share indexes opened higher, with the STOXX 600 up 0.4% and
London's FTSE 100 up 0.3% at 0803 GMT.
The MSCI world equity index, which tracks shares in 49 countries, was up
0.2%. MSCI's main European Index was up 0.7%.
VACCINE TREATMENT
"It has been suggested that yesterday’s rally was as a result of
optimism over a new vaccine treatment being fast tracked by October,
however the reality is that anyone with an ounce of common sense will
know that this outcome is highly unlikely to happen," wrote Michael
Hewson, chief market analyst at CMC Markets UK.
"Yesterday's rebound was probably driven by nothing more than a lack of
bad news, fear of missing out, and expectations of continued central
bank monetary stimulus," he said.
Hewson added that the rebound in U.S. stocks could be called
"unbalanced" as it is being driven by a relatively small group of big
technology companies.
[to top of second column]
|
Employees of the Tokyo Stock Exchange (TSE) work at the bourse in
Tokyo Japan, October 11, 2018. REUTERS/Issei Kato
The dollar index fell gradually overnight, down 0.2% at 93.061 by
0803 GMT, while the euro was up 0.4% at $1.18325.
Euro zone bond yields rose for the second day in a row, with the
benchmark ten-year German Bund yield at -0.468%.
Germany's final second quarter GDP was revised slightly upwards to a
9.7% contraction in April, May and June, up from 10.1%.
This record decline is much stronger than in the financial crisis
more than a decade ago, and is the sharpest fall since Germany began
to record quarterly GDP calculations in 1970.
Oil prices were mixed, with Brent crude oil futures up 0.3% at
$45.25 a barrel by 0806 GMT, while U.S. West Texas Intermediate
crude CLc1 was down 0.2%, at $42.55 a barrel.
Market participants are looking ahead to the U.S. Federal Reserve
Chair Jerome Powell's address at the Jackson Hole symposium - his
first public appearance since the central bank's policy meeting in
late July.
Investors have been eagerly awaiting details on possible changes to
how the Fed targets inflation that, in the current environment,
could mean the Fed sticks with aggressive stimulus measures longer
than under its previous rubric.
Markets seemed indifferent to news of the first documented instance
of coronavirus re-infection in a human. A Hong Kong man who
recovered from COVID-19 was infected again four-and-a-half months
later, researchers at the University of Hong Kong said on Monday.
Elsewhere, France said it will require travellers entering the
country from the UK to self-certify that they are not suffering
coronavirus symptoms or have been in contact with a confirmed case
within 14 days preceding travel.
(Reporting by Elizabeth Howcroft; Editing by Giles Elgood)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|