Futures advance while oil declines to five-month low

Bloomberg

US futures climbed along with most European stocks in a volatile start to a crucial week spanning the US election and a Federal Reserve policy meeting.
The picture was mixed across global markets with crude prices and commodity currencies weakening on concern that tougher lockdowns will dent economic growth. In European equities, companies that benefit from people staying at home were among the top winners, while airlines and retailers posted losses.
S&P 500 futures rise, while the dollar ticked higher with Treasuries and gold. The moves at the beginning of November come after global equities posted two months of losses.
The main event this week will be Tuesday’s US election, with Democratic nominee Joe Biden leading President Donald Trump in polls. Virus developments are also front and center with the recent surge in US cases showing signs of slowing over the weekend. Countries in Europe are restricting the movement of people in a bid to contain the spread of the pathogen.
“Whichever way you look at it, this coming week will be huge for US and global markets,” said Simon Ballard, chief economist at First Abu Dhabi Bank PJSC. “We see the potential for a sharp rise in volatility around these events — and all in the context of a still deteriorating Covid-19 situation across much of the US, Europe and elsewhere.”
Oil tumbled to a five-month low on the back of a surge in Libyan crude production and concern that tougher European lockdowns will dent travel demand. The selloff had an impact on other markets, with the ruble tumbling past 80 against the dollar to its weakest level since March.
“Investors are in a wait and see mode, with more position squaring ahead of the elections,” said Mohit Kumar, managing director at Jefferies International.
Futures on the S&P 500 Index increased 0.4% as of 9:17 am London time and the Stoxx Europe 600 Index rises 0.4%.
While the MSCI Asia Pacific Index jumped 1%, the MSCI Emerging Market Index jumped 0.7%.
The Bloomberg Dollar Spot Index rises 0.2% and the euro was little changed at $1.1642.
While the British pound sank 0.5% to $1.2878, the Japanese yen weakened 0.2% to 104.87 per dollar. The offshore yuan was little changed at 6.6952 per dollar.
The yield on 10-year Treasuries declined one basis point to 0.87% and the yield on two-year Treasuries was unchanged at 0.15%.
While Germany’s 10-year yield increased one basis point to -0.62%, Britain’s 10-year yield fell one basis point to 0.256%. Japan’s 10-year yield increased less than one basis point to 0.045%.
West Texas Intermediate crude declined 2.4% to $34.85 a barrel and Brent crude dipped 2% to $37.10 a barrel. Gold strengthened 0.4% to $1,886.49 an ounce.