The Minute of Wednesday
- Global equities boost gains on recovery and stimulus hopes, with a potential US-China meeting on sentiment of trade boost.
- Bloomberg reports that trade officials will meet next week to discuss Phase 1 trading, with talks likely to focus on the US ban on TikTok and WeChat as well.
- Gold prices tumble back to $ 1,900 per ounce as world sentiment improves, while 10-year bond yields rise to 0.676% ahead of a record Treasury auction.
- Oil prices bulge higher on EIA outlook and API drawdown, raising Brent crude back to $ 45 per barrel.
- US equity futures suggest a firm opens on Wall Street ahead of a $ 38 billion 10-year bond auction later in the session.
US equity futures recovered gains on Wednesday as Treasury bond yields rose and gold prices rebounded recently as investors watched singing of a broader global recovery, and fresh stimulus from the US, while easing tensions between Washington and Beijing refurbished.
US and Chinese trade representatives are set to meet next week to discuss various aspects of the Phase 1 trade agreement signed earlier this year, according to Bloomberg, with data showing slightly more than 5% compliance with US purchases left by Chinese officials.
Bloomberg also announced that issues such as the forced sale of TikTok’s US operations, and the banning of WeChat, will be raised during the meeting, amid heightened political tensions between the world’s two largest economies.
Improving economic data from both Europe and Asia, the $ 20 trillion lending effect in stimulating government and central bank and hoping for a near-term agreement between lawmakers on Capitol Hill for a new round of coronavirus delivery for unemployed Americans shares traded higher on Wednesday, with the S&P 500 moving upwards again after striking distance from its full half of February.
Futures contracts tied to the Dow Jones Industrial Average suggest an opening of 250 points from a clock gain, a move that would take the average back to the 28,000 point mark, while those linked to the S&P 500 prices for a 25 point ahead for the broader benchmark. Nasdaq futures accuse a 10-point opening of the clock gain for the tech-oriented index.
However, the larger, and perhaps more important transition of the night, came in the bond market, where benchmark 10-year US Treasury note yields jumped to 0.68%, up 16 basis points from last week’s levels and it highest in five weeks, as traders and investors brought in $ 38 billion in new supply later today and the largest 10-year bond auction in history.
The US dollar index, which measures the greenback against a rate of its global currency peers, was 0.12% lower at 93,518 in overnight trading as sentiment improved, while gold prices extended their recent retreat, and fell to $ 1,930.68 per ounce and more than $ 100 spike for the full-time end of last week.
European equities were moderately higher in Frankfurt’s early session, with the Stoxx 600 rising 0.33%, while Britain’s FSTE 100 added 1.17%, even after data showed the UK economy in the second quarter the recession came with a 20.4% GDP contract, the largest on record and the largest of any major global economy.
Global oil markets used a weaker US dollar, a larger-than-expected decline in domestic crude shares of 4 million barrels reported by the US Petroleum Institute and an impetus in the Energy Department’s 2020 demand forecast to beat crude prices higher, some of some back complained about the losses from yesterday’s sales.
WTI contracts for September delivery, the US benchmark, sold 65 cents higher than their Tuesday close in New York and were trading hands at $ 42.26 per barrel in early European trade, while Brent contracts for October , the new global benchmark, were seen 67 cents higher at $ 45.17 per barrel.
Overnight in Asia, Japanese Nikkei 225 ended the session 0.4% higher at 22,843.96 points, while region-wide MSCI ex-Japan benchmark slipped 0.14% as China shares traded in the red for a second consecutive session, and offset gains in Hong Kong and South Korea.
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