Europe stocks advance with bond yields; gold rebounds

Bloomberg

US equity futures advanced and stocks edged higher in Europe as bank shares rallied and bond yields climbed globally. Gold rebounded after finding support below $1,900 an ounce.
Advances in ABN Amro Bank NV and HSBC Holdings Plc offset drops in tech and real estate shares on the Stoxx Europe 600 Index. The pound held Tuesday’s drop versus the euro, as data showed the UK economy contracted last quarter by more than any other in Europe. Nasdaq 100 futures climbed after three sessions of declines for the tech-heavy gauge.
Silver joined gold’s rebound, with investors deciding the flight from precious metals amid advancing bond yields had gone too far. The dollar was steady against a basket of its peers.
Investors are weighing whether a rotation in equities is under way as pandemic high-flyers including Advanced Micro Devices and Zoom Video Communications tumbled for a third day. Traders are also on the lookout for a break to the deadlock in Washington on more stimulus spending.
There’s some portfolio switching “given the constant flurry of concerns about crowded positioning and stretched valuations in growth sectors such as tech and communication services,” said Matthew Sherwood, head of investment strategy for multi-asset at Perpetual Investment. “Value and cyclicals continue to be supported by positive economic surprise momentum.”
Meanwhile, Joe Biden chose Senator Kamala Harris as his running mate, betting that her ties to the African-American community and self-branding as a “progressive prosecutor” will help propel him to the White House. On the virus front, California reported a sharp jump in cases. Futures on the S&P 500 Index rose 0.7% as of 9:47 am London time and the Stoxx Europe 600 Index gained 0.3%.
While the MSCI Asia Pacific Index rises 0.2%, MSCI Emerging Market Index decreased 0.1%. The Bloomberg Dollar Spot Index was little changed and euro rise 0.1% to $1.1751.
While the British pound was little changed at $1.3052, the onshore yuan was little changed at 6.947 per dollar. The Japanese yen weakened 0.3% to 106.81 per dollar.
The yield on 10-year Treasuries gained two basis points to 0.67% and the yield on two-year Treasuries climbed less than one basis point to 0.15%.
While Germany’s 10-year yield jumped three basis points to -0.45%, Britain’s 10-year yield rose three basis points to 0.226%. Japan’s 10-year yield increased one basis point to 0.045%.
While West Texas Intermediate crude gained 1.3% to $42.15 a barrel, Brent crude increased 1.2% to $45.04 a barrel and gold strengthened 1% to $1,930.31 an ounce.