(Bloomberg) -- Stocks advanced globally after the U.S. and China reached a fresh truce in the trade war and agreed to resume talks toward a deal. Gold, the yen and Treasuries all retreated, but a series of weak factory reports from major economies took the edge off the bond drop.
The S&P 500 Index looked set to test its all-time high at the New York open as futures on the three main U.S. equity gauges rallied. Contracts for the Nasdaq 100 Index set the pace after President Donald Trump agreed to ease a ban on American companies supplying Chinese tech giant Huawei. Technology shares helped to boost the Stoxx Europe 600 Index. Crude surged on the trade news and as major producers agreed to extend output cuts. Stocks in Shanghai and Tokyo led Asian gains, while markets in Hong Kong were closed for a holiday as fresh unrest hit the city.
The euro trimmed a decline and European bonds were mixed as data showed manufacturers in the region remained firmly stuck in a slump last month, and as leaders failed again to agree who will fill key European Union roles, including the presidency of the central bank. Italian bonds surged, reflecting optimism that the European Commission won’t penalize the nation this summer over its budget deficit. The pound weakened as a U.K. factory gauge contracted.
Traders seem cautiously optimistic in the wake of the G-20 gathering, though the move to delay further tariffs and resume talks doesn’t offer much clarity on the critical issues. Investors have also been assessing global growth as a series of major purchasing manager readings on Monday morning showed declines, while Japan said it plans to slap export restrictions on some tech items to South Korea. U.S. factory data are also due today.
“The odds of another full blown conflict have moderated as the U.S. administration is de-escalating,” Sebastien Galy, senior macro strategist at Nordea Investment, wrote in a note on Monday. “That being said, there are still a lot of reasons to be cautious.”
Elsewhere, the lira rallied after Trump indicated he may reassess his threats to sanction Turkey if it goes ahead with a Russian missile purchase. Swiss stocks rose as much as 1.3% as never-before-tested provisions to safeguard liquidity kicked in following a showdown with the European Union. Gold dropped the most in a year.
Here are some key events coming up:
Boris Johnson and Jeremy Hunt continue their campaign to be the next U.K. prime minister.OPEC+, a wider coalition that includes Russia, is meeting in Vienna.The U.S. celebrates the Independence Day holiday on Thursday.The U.S. jobs report is due Friday and is projected to show nonfarm payrolls rose by 160,000 in June, rebounding from 75,000 the month prior.
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index gained 1.1% as of 7:23 a.m. New York time to the highest on record with the largest rise in almost four weeks.The Stoxx Europe 600 Index gained 0.9% to the highest in almost two months.The U.K.’s FTSE 100 Index climbed 0.3% to the highest in almost two weeks.The MSCI Asia Pacific Index increased 0.8% to the highest in almost two months.
Currencies
The Bloomberg Dollar Spot Index rose 0.2% to the highest in more than a week on the largest advance in more than two weeks.The euro dipped 0.2% to $1.1353, the weakest in more than a week.The British pound fell 0.4% to $1.2645, the weakest in more than a week.The Japanese yen declined 0.4% to 108.27 per dollar, the weakest in almost two weeks.
Bonds
The yield on 10-year Treasuries increased one basis point to 2.01%.Germany’s 10-year yield climbed less than one basis point to -0.33%.Britain’s 10-year yield gained one basis point to 0.814%, the highest in more than a week.
Commodities
Gold dipped 1.3% to $1,391.63 an ounce, the weakest in more than a week on the biggest decrease in more than three months.West Texas Intermediate crude increased 2.5% to $59.93 a barrel, the highest in almost six weeks.
--With assistance from Namitha Jagadeesh and Anchalee Worrachate.
To contact the reporter on this story: Laura Curtis in London at lcurtis7@bloomberg.net
To contact the editor responsible for this story: Samuel Potter at spotter33@bloomberg.net
For more articles like this, please visit us at bloomberg.com
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2019-07-01 11:26:00Z
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