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Photo credit: Yuriko Nakao / Bloomberg
Photo credit: Yuriko Nakao / Bloomberg
The Chinese yuan rose in offshore trading after a slightly stronger than expected fix for the domestic exchange rate, while US equity futures erased the losses.
Shares in Shanghai rebounded to trade unchanged after opening moderately lower as Chinese traders came back online after a five-day break. Australian stocks fell, while Hong Kong and Korean stocks advanced. European futures withdrew. Oil prices slightly increased recent gains, while the yen rose to its highest level since mid-March, when markets were hit by emergency demand for dollar cash. Treasury bills await London opening, with Tokyo closed.
The Chinese yuan’s onshore fixation on Wednesday was slightly stronger than expected, following declines in the foreign currency during the Chinese holiday amid mounting tensions with the United States. Fears of a new trade war have increased along with comments from the Trump administration blaming China for the global pandemic.
The S&P 500 saw a nearly 2% gain cut in half in the last hour of trading Tuesday after Fed vice president Richard Clarida warned the economy will need more government support. Walt Disney Co. fell into commerce outside business hours, becoming the latest company to detail the severity of the pandemic’s impact on its entertainment business.
“As we ease these blockages, there is still a risk that, of course, you will have to tighten controls,” Andrew Wilson, president of global fixed income at Goldman Sachs Asset Management, said on Bloomberg TV. “It absolutely depends on what happens with regard to infection rates and whether there is a so-called second wave,” he said of the market and the economic outlook.
Marko Kolanovic, global head of quantitative macro at JPMorgan, says the S&P 500 will hit a record early next year.
Here are some key events to come:
- The Bank of England has a political decision on Thursday.
- Friday brings the US jobs report for April, which is expected to show a severe impact from the pandemic. The average forecast in a Bloomberg survey of economists calls for a 21 million drop in payrolls.
These are some of the main movements in the markets:
Stocks
- The S&P 500 futures changed little as of 5:37 a.m. in London. The indicator added 0.9% on Tuesday.
- The Shanghai compound added 0.1%.
- Australia’s S & P / ASX 200 Index lost 0.7%.
- South Korea’s Kospi index added 1.3%.
- The Hang Seng Index was up 0.7%.
- Euro Stoxx 50 futures fell 0.7%.
Coins
- The yen was at 106.34 per dollar, an increase of 0.2%.
- The offshore yuan gained 0.3% at 7,1037 per dollar, while the onshore rate fell 0.4% to 7.0889 per dollar.
- The euro bought $ 1.0836, little changed.
Captivity
- The yield on 10-year Treasuries rose two basis points to 0.66% on Tuesday.
- Australia’s 10-year yield rose three basis points to 0.90%.
- New Zealand’s 10-year yield rose nine basis points to 0.81%.
Basic products
- West Texas Intermediate crude fell 1% to $ 24.31 per barrel.
- Gold fell 0.2% to $ 1,702.84 an ounce.
– With the assistance of Alex Longley, Srinivasan Sivabalan and Joanna Ossinger
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