Gains in mining shares were offset by a drop in banks and telecoms in the Stoxx Europe 600 Index, while the S&P 500 looked set to hover near its record high after the US and Mexico moved closer to a deal on trade.
Stocks in Japan extended a recent increase while those in China underperformed. The yuan edged higher as the Chinese central bank strengthened the daily fixing against the greenback by the most in more than 14 months, even as President Donald Trump said it’s not the right time for trade negotiations with China.
The Mexican peso fell after initially rallying on the deal news as investors clamored for details and clarity on where it leaves Canada. UK equities rose in a catch-up rally as traders returned from a holiday, while the pound steadied as Prime Minister Theresa May said a no-deal break with Europe wouldn’t be the end of the world.
The Bloomberg Dollar Spot Index was little changed. Italian stocks and bonds fell, while Treasuries and German bunds were steady.
Optimism around the US-Mexico deal is helping shift the news agenda in markets in the wake of Trump’s legal woes last week, while the Federal Reserve’s outlook has also boosted sentiment. Gains for risk assets remain fragile, however, as hopes for a similar trade breakthrough between American and China fade and a host of threats remain, from US relations with Russia and North Korea to Chinese growth prospects.
“On a broad sense, if markets were worried about trade tensions and trade talks escalating into full-blown wars at least this is one sign that there is a cooling off period and that some parts of the global trade space will still be connected and as free markets would hope,” Nandini Ramakrishnan, global market strategist at JPMorgan Asset Management said. “Another good example: European discussions this summer came down to a very conciliatory, almost non-issue.”
Elsewhere, Turkey’s lira fell and WTI oil hovered around $69 a barrel. Bitcoin climbed for the fourth successive weekday, breaking above its 50-day moving average.
These are the main moves in markets so far in the day:
- The Stoxx Europe 600 Index increased less than 0.05% as of 9:56 AM London time, the highest in more than two weeks
- Futures on the S&P 500 Index declined less than 0.05%
- The MSCI Emerging Market Index advanced 0.3% to the highest in almost three weeks
- The MSCI Asia Pacific Index climbed 0.4% to the highest in almost three weeks
- The Bloomberg Dollar Spot Index dipped 0.1% to the lowest in four weeks
- The euro climbed 0.1% to $1.1695, the strongest in more than four weeks
- The British pound advanced 0.1% to $1.2907
- South Africa’s rand gained 0.1% to 14.1536 per dollar, the strongest in more than two weeks
- The yield on 10-year Treasuries was unchanged at 2.85%, the highest in more than a week
- Germany’s 10-year yield fell one basis point (bps) to 0.37%, the largest fall in more than a week
- Britain’s 10-year yield advanced 17bps to 1.451%, the highest in 14 weeks on the biggest rise in five years
- Gold increased 0.1% to $1,213.19 an ounce, the highest in almost three weeks
- Brent crude advanced 0.6% to $76.66 a barrel, the highest in seven weeks
- LME copper gained 0.5% to $6,136.00 per metric ton, the highest in more than two weeks