LONDON (Reuters) – Markets showed signs of optimism on Friday, with the opening of European stocks and rising oil prices despite a record number of new COVID-19 infections in the United States.
FILE PHOTO: A man in a protective face mask walks past the London Stock Exchange Group building in the City of London Financial District, London, Great Britain, March 9, 2020. REUTERS / Toby Melville
On Thursday they increased in the US by at least 39,818, the largest increase in the pandemic in one day. The Texas governor temporarily halted the state’s reopening on Thursday as infections and hospitalizations increased.
But European stocks opened higher, with the Stoxx 600 rising 0.8% and the London FTSE 100 rising 1% at 0736 GMT .FTSE.
The MSCI .MIWD00000PUS world capital index, which tracks stocks in 49 countries, was up 0.3%, extending gains from Thursday night.
“While we continue to see some pretty creepy numbers of viruses coming out of the US, it’s not really a dented sentiment, at least on a sustained basis,” said Timothy Graf, head of macro strategy at EMEA on State Street Global Advisors.
Graf said recent temporary downward corrections to market optimism have had little follow-up.
The possibility of a second wave of coronaviruses and renewed blockades has a limited impact on the market because if the blockade measures are resumed, the markets expect this to increase the probability of greater fiscal support for the economies.
“There is a disconnect between what you think should be the case by looking at the virus numbers and the riskier stocks and currencies that are holding up relatively well and volatility going down, but at the same time we have never seen a political response like this, not in the last 80 years at least, “said Graf.
After rising between 0500 and 0700 GMT, the dollar fell in early London trading at 97,317 against a basket of currencies at 0745 GMT = USD.
The riskiest New Zealand dollar rose 0.2% NZD = D3, having passed most of June to the level it was before the coronavirus crisis for the markets peaked in March.
Oil prices rose on Friday, spreading gains on optimism about the recovery in fuel demand worldwide, despite signs of a resurgence in U.S. crude production.
US West Texas Intermediate (WTI) CLc1 crude futures gained 26 cents, or 0.7%, at $ 38.98, while Brent LCOc1 crude futures rose 36 cents, or 0.9%, at $ 41.41.
The US Senate passed legislation that would impose mandatory sanctions on individuals or companies that support China’s efforts to restrict Hong Kong’s autonomy, at another possible Sino-American high point.
To become law, it must also pass the House and be signed by President Donald Trump. Support for pro-democracy protests in Hong Kong has declined, although it retains the support of a slim majority, a survey by Reuters showed.
But the demand for safe public debt in the euro zone changed little, with Germany’s 10-year Bund yield close to the monthly lows at -0.479% DE10YT = RR.
The yield on 10-year Treasury bonds US10YT = RR was stable at 0.6725%. XAU Gold = rose slightly to $ 1,763.65 an ounce. US / GOAL /
Graphic: Gold, here (1) .png
According to most of the more than 160 economists surveyed by Reuters, the pandemic is more likely to leave a legacy of weak or declining prices for goods and services than to trigger higher global inflation.
The euro zone is “probably past” the worst of the economic crisis caused by the pandemic, European Central Bank President Christine Lagarde said on Friday, urging authorities to prepare for a possible second wave.
“There is still a belief that the unemployment we see is temporary, there is still a belief that companies will be able to return to normal, but it is probably correct to think that is too simple,” said Graf of State Street.
Elizabeth Howcroft’s Reports; Editing by Mark Heinrich