NEW YORK (Reuters) – Global equities benchmarks rose on Monday and gold rocketed to a record high on Monday as investors weighed in on expectations for another U.S. stimulus package with concern that mounting tensions between the United States and China will delay the recovery of the world economy. economy of the coronavirus pandemic.
Gold jumped 1.6% to hit its 2011 highs and bring $ 2,000 an ounce into view. Silver rose 7.5% to spend its July streak more than 30%, which would be its best month on record.
China took over the facilities of the US consulate in the southwestern city of Chengdu on Monday, after ordering that the facility be vacated in retaliation for China’s expulsion from its consulate in Houston last week.
United States Secretary of State Mike Pompeo said Washington and its allies must use “more creative and assertive ways” to pressure the Chinese Communist Party to change its ways.
“The President of the United States (Donald) Trump used to say that the President of China, Xi Jinping, is a great leader. But now Pompeo’s newsroom is becoming so aggressive that markets are beginning to worry about further escalation, “said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
MSCI’s worldwide inventory index gained 0.65% following mixed trade in Asia and a broad decline in Europe after the UK imposed a quarantine on travelers returning from Spain, which has seen a increase in coronavirus cases.
Chart: global assets – here
Chart: Global currencies vs. dollar – here
Chart: Emerging Markets – here
Chart: MSCI All Country Wolrd Index Market Cap – here
In midday trade on Wall Street, the Dow Jones Industrial Average rose 75.45 points, or 0.29%, to 26,545.34, the S&P 500 gained 15.32 points, or 0.48%, to 3,230.95, and the Nasdaq Composite added 109.49 points, or 1.06%, at 10,472.67.
Hopes for a rapid economic recovery in the United States are fading as coronavirus infections showed little sign of slowing down. That means the economy could suffer without new government support, with some earlier steps, such as improved unemployment benefits due this month.
Investors hope that the United States Congress will reach an agreement before its summer recess. United States Treasury Secretary Steve Mnuchin said the package will contain extended unemployment benefits with a 70% “wage replacement”.
Concerns about the US economic outlook have also begun to weigh on the dollar. The dollar index fell 0.5% to its lowest level in almost two years.
The euro gained 0.5% to a 22-month high of $ 1.1725, continuing a winning streak since last week’s deal on a post-pandemic EU recovery fund of € 750 billion.
Benchmark 10-year notes fell 2/32 in the past price to yield 0.5938%, from 0.589% at the end of Friday.
“If you look at the fact that the dollar has been performing higher than many other currencies for quite some time, and with some of the benefits that it has eroded … and also the continued demand for a safe haven, it all plays out. in gold. ” strengthening, “said Shafali Sachdev, head of FX Asia at BNP Paribas Wealth Management in Singapore.
“And at this point, there doesn’t seem to be any obvious factor that can help the trend come to an end.”
US crude recently rose 0.07% to $ 41.32 a barrel and Brent was at $ 43.13, down 0.48% on the day.
Report by David Randall. Additional reports by Sujata Rao and Marc Jones in London, Hideyuki Sano in Tokyo and Tom Westbrook in Singapore; Steve Orlofsky and Nick Zieminski edition
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