Euro Reaches 4-Month High, Stocks Rise on EU Talks: Markets Wrap - Yahoo Canada Finance

Euro Reaches 4-Month High, Stocks Rise on EU Talks: Markets Wrap

(Bloomberg) -- The euro climbed to a four-month high, European bond spreads narrowed and stocks rose as leaders made progress in negotiating a historic stimulus package. U.S. equity futures were mixed with the S&P 500 coming off a three-week rally.

Italy’s 10-year bond yield spread over Germany, a key gauge of risk in the region, fell to the lowest level since March. Noble Energy Inc. advanced after Chevron Corp. agreed to buy the company for about $5 billion in shares. AstraZeneca Plc gained ahead of highly anticipated results from early vaccine studies. Oil declined toward $40 a barrel.

Futures on the Nasdaq 100 Index added 0.4%, while S&P 500 contracts were little changed.

In Europe, leaders appeared close to reaching an agreement on a rescue package. The four governments that have been holding up negotiations are ready to agree on a key plank of the deal, two officials said. The Netherlands, Austria, Denmark and Sweden are satisfied with 390 billion euros of the fund being made available as grants with the rest coming as low-interest loans, the officials said, asking not be named discussing private conversations.

EU Holdouts Ready to Accept 390 Billion Euros in Grants for Fund

“Our base case is a deal is done by the end of the month, but I still think today is possible,” said James McCormick, the global head of desk strategy at NatWest Markets. “The euro’s broad-based rally was a big macro story last week and it clearly reflected a growing optimism around eventual passage of the recovery fund.”

While stock markets have inched higher in recent weeks, there are still plenty of worries about the health of the global economy, especially with the virus spreading unabated in parts of the U.S. In the euro area, unemployment could hit almost 10% by the end of the year as the economy slumps, according to a Bloomberg survey.

A Jobless Recovery Is Becoming a Real Risk for Europe’s Economy

Los Angeles Mayor Eric Garcetti has warned that the city is on the brink of another stay-at-home order. Hong Kong added a record 108 infections, will require civil servants to work from home and plans to mandate wearing of masks in all shared indoor areas.

”The economic dislocation of Covid-19 triggered a tremendous response by fiscal and monetary policy makers as well as central banks,” said Gene Tannuzzo, a portfolio manager at Columbia Threadneedle. “These measures helped to stabilise markets, yet we still find ourselves in an environment of continuous low growth.”

Here are some key events coming up:

Quarterly earnings gather steam, including Blackstone Group, Microsoft, Roche, Intel, Unilever, Canadian Pacific, UBS, Tokyo Steel, Daimler, Hyundai and Mattel.The EIA crude oil inventory report is due Wednesday.U.S. weekly jobless claims come on Thursday.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index were little changed at 7:53 a.m. New York time.The Stoxx Europe 600 Index gained 0.4%.The MSCI Asia Pacific Index increased 0.3%.The MSCI Emerging Market Index rose 0.4%.

Currencies

The Bloomberg Dollar Spot Index declined 0.2%.The euro rose 0.3% to $1.1461.The British pound rose 0.6% to $1.2636.The Japanese yen weakened 0.1% to 107.09 per dollar.The offshore yuan strengthened 0.1% to 6.9867 per dollar.

Bonds

The yield on 10-year Treasuries sank one basis point to 0.61%.The yield on two-year Treasuries dipped less than one basis point to 0.14%.Germany’s 10-year yield was unchanged at -0.45%.Britain’s 10-year yield fell one basis point to 0.155%.Japan’s 10-year yield gained one basis point to 0.031%.

Commodities

West Texas Intermediate crude fell 0.4% to $40.36 a barrel.Brent crude dipped 0.4% to $42.89 a barrel.Gold strengthened 0.2% to $1,814.05 an ounce.

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2020-07-20 11:56:00Z
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