European stocks bounce back as dollar advances

Bloomberg

Stocks rebounded in Europe after their biggest drop in almost two months as Brexit talks continued and the US Senate passed a spending bill.
The Stoxx 600 Index was 0.6% higher at the open as cyclicals staged a comeback following an outbreak of a new variant of the virus and a slew of lockdowns and travel curbs to contain it. The FTSE 100 Index lagged other major European markets, and the pound weakened.
UK Prime Minister Boris Johnson faces a crisis at home after France halted freight traffic to stop the spread of the variant virus strain. With key transport links frozen and the island nation looking increasingly isolated, Johnson made a fresh proposal to secure an 11th-hour trade deal with the European Union (EU).
S&P 500 futures edged lower following declines in the benchmark. Treasuries ticked higher with the dollar, and crude oil slumped for a second day.
Global stocks have pulled back after touching a record high last week. Rising virus cases and the emergence of a variant strain in Britain have dented the return-to-work trade, overshadowing a $900 billion US pandemic relief package and the initial rollout of vaccines. US lawmakers cleared the spending legislation, which now passes to President Donald Trump to sign.
The bill will provide some relief, but “will do little to accelerate the arrival of an economic recovery,” David Kelly, chief global strategist at JPMorgan Asset Management, said in a note. “Investors should also recognise that, after a surprisingly good year for portfolio returns, asset prices look stretched.”
Futures on the S&P 500 Index decreased 0.2% as of 8:29 am London time and the Stoxx Europe 600 Index gained 0.8%. While the MSCI Asia Pacific Index sinks 1%, the MSCI Emerging Market Index dipped 0.6%.
The Bloomberg Dollar Spot Index gained 0.2% and the euro decreased 0.3% to $1.2207.
While the British pound fell 0.3% to $1.3428, the onshore yuan was little changed at 6.547 per dollar. The Japanese yen weakened 0.1% to 103.38 per dollar.
The yield on 10-year Treasuries sinks two basis points to 0.92% and the yield on two-year Treasuries fell less than one basis point to 0.12%.
While Germany’s 10-year yield declined two basis points to -0.60%, Japan’s 10-year yield decreased less than one basis point to 0.01%. Britain’s 10-year yield dipped less than one basis point to 0.202%.
West Texas Intermediate crude declined 1.8% to $47.09 a barrel and Brent crude dipped 1.7% to $50.06 a barrel. Gold weakened 0.3% to $1,870.97 an ounce.