LONDON (Reuters) – Stock markets rallied for a second straight session on Monday in hopes of treating coronavirus risk assets and the markets stepped up for the U.S. Federal Reserve’s annual meeting later this week.
FILE PHOTO: The London Stock Exchange Group’s offices are on display in the City of London, UK, December 29, 2017. REUTERS / Toby Melville
Europe’s pan-regional STOXX 600 rose 1.3% and the global benchmark added 0.4% after US regulators authorized the use of blood plasma from recovering patients as a treatment option.
The rise follows healthy gains in Asia, where MSCI’s broadest index of shares in Asia-Pacific ex-Japan jumped 0.8% to flirt with a high of six months last week and Japan’s Nikkei added 0.3%.
US futures signaled gains on Wall Street ahead, raising the outlook for record highs for the S&P 500.
Markets lapped up an announcement from the U.S. Food & Drug Administration for an “emergency use authorization” that could allow the use of blood plasma from patients recovering from COVID-19 as a treatment for the disease.
“Every time news is seen as something that helps fight coronavirus, it gives a sense of sentiment,” said Shane Oliver, chief economist in Sydney at AMP.
Stock market sentiment was also supported by a Financial Times report that the Trump administration is considering passing normal U.S. regulatory standards to track a United States experimental coronavirus vaccine for use in the United States ahead of the presidential election. November.
However, growing infection numbers in various parts of the world, especially Europe, are throwing a cloud over recent gains, analysts said.
“Despite its relative success in suppressing the first wave of the virus, it is Europe that has begun to re-emerge as a source of concern in recent days, seeing recent rises in cases of numbers, a trend driven by the weekend went, “Henry Allen told Deutsche Bank.
Great this week came an address by Jerome Powell of Federal Reserve Chairman at the Kansas City Fed Jackson Hole symposium, where he will discuss the Fed’s framework for monetary policy.
“Fed Chairman Powell will (almost) talk about the Fed’s Policy Framework Review, and we see an opportunity for the Fed to shift to an average inflation target or at least change its approach to inflation that exceeds the target,” said Lina Fransson, SEB in a letter to clients.
The risk-taking mood also filtered through to steady-income markets with safe-haven German bond yields ticking up after falling for six consecutive sessions last week, the longest decline since January. [GVD/EUR]
In currency markets, the dollar index slipped and the dollar weakened against the Japanese yen from the safe haven at 105.83. The British pound remained stable at $ 1.3090 after falling 0.9% on Friday due to lack of progress in talks following the Brexit trade with the European Union. The euro fell to $ 1.1800 after falling 0.5% on Friday after disappointing data on manufacturing activity.
Storms that hit the Gulf of Mexico, shutting down more than half of their oil production, helped boost crude oil futures. Brent rose 26 cents to $ 44.61 a barrel and US crude climbed 24 cents to $ 42.58. [O/R] Gold recovered from early losses to trade 0.4% higher at $ 1,947.20 an ounce.
Report by Karin Strohecker in London, supplementary report by Swati Pandey in Sydney; edited by Larry King