European stocks pare losses on optimism over economic recovery

Bloomberg

European stocks pared losses and US equity futures rallied as investors bet that the economic recovery will keep going, even as virus infection rates rise.
Gold approached the highest since 2012, while Treasuries and the dollar were little changed. Retail stocks climbed, limiting losses in the Stoxx Europe 600 Index. Wirecard AG shares were in freefall again as the German company said the missing 1.9 billion euros ($2.1 billion) of cash on its balance sheet probably doesn’t exist.
Hong Kong stocks slumped after China moved to tighten oversight of the city. Crude oil hovered below $40 a barrel in New York.
Even as virus cases rise in Germany and the US states of Florida, California and Texas, there’s growing speculation that politicians will be unwilling to put cities back on lockdown because of the economic toll. At the same time, markets have been supported by historic stimulus programs by central banks around the world, with policymakers vowing to get growth back on track.
In the UK, Prime Minister Boris Johnson is preparing to relax social distancing rules in a major boost to the UK’s hospitality industry, as the government seeks to re-open more sectors of the economy that have been shut during the lockdown.
“The market doesn’t believe that we will see such draconian lockdowns even if there is a resurgence of the virus. The politics have moved on,” said James Athey, a money manager at Aberdeen Standard Investments. “Rightly or wrongly, there’s also a pretty widespread feeling that riskier assets won’t go down too far, because the Federal Reserve won’t let them.”
MSCI Inc. will announce its market classification review for 2020 on Tuesday and IMF will also release new 2020 growth projections on Wednesday.
Futures on the S&P 500 Index climbed 0.8% as of 9:11 am London time and the Stoxx Europe 600 Index gained 0.6%.
While the UK’s FTSE 100 Index jumped 1.1%, the MSCI Asia Pacific Index also increased 0.2%. The MSCI Emerging Market Index advanced 0.6% to 1,001.36.
The Bloomberg Dollar Spot Index decreased 0.2% to 1,217.51 and the euro climbed 0.3% to $1.1209.
While the British pound jumped 0.6% to $1.2424, the onshore yuan weakened 0.1% to 7.078 per dollar and the Japanese yen weakened 0.1% to 106.93 per dollar
The yield on 10-year Treasuries dipped less than one basis point to 0.69% and the yield on two-year Treasuries gained less than one basis point to 0.19%.
While Germany’s 10-year yield fell one basis point to -0.42%, Britain’s 10-year yield jumped one basis point to 0.238%.
and Japan’s 10-year yield sank one basis point to 0.01%.
As West Texas Intermediate crude increased 0.1% to $39.78 a barrel, Brent crude advanced 0.3% to $42.32 a barrel and gold strengthened 0.2% to $1,747.94 an ounce.