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Bloomberg
Stocks advanced alongside US equity futures as plans for more American stimulus revived investor sentiment. A gauge of European corporate debt risk fell the most in two months.
Carnival Plc and EasyJet Plc rallied more than 7%, helping lead gains in the Stoxx Europe 600 Index. The dollar weakened against almost all of its major peers. The pound climbed as much as 0.7% against the dollar after positive talk around the Brexit negotiations renewed hope that a deal can be reached.
Government stimulus has been a key feature of the equities rally, despite soaring unmployment and signs that a second wave of the virus is starting to emerge. Now there are signs that more economic support is on the way.
The Trump administration is preparing a nearly $1 trillion infrastructure proposal as part of its push to spur the world’s largest economy back to life, according to people familiar with the plan. On top of that, the Federal Reserve plans to start buying corporate bonds.
“The size and the pace of Fed balance sheet expansion is something that will put a floor under global equity markets,†Stephen Gallo, BMO Capital Markets head of European FX strategy, said on Bloomberg TV.
Elsewhere, Japanese shares got added support from the Bank of Japan increasing a corporate-lending support program. Oil was steady at about $37 a barrel in New York trading amid signs of improving demand and declining production.
While policy decisions from the Bank of England and the Swiss National Bank are due later this week, the New York Stock Exchange may allow a limited number of market makers to return to its historic trading floor on Wednesday.
The Stoxx Europe 600 Index advanced 2% as of 9:36 am London time and futures on the S&P 500 Index climbed as much as 1%.
While Nasdaq 100 Index
futures advanced 1%, the MSCI Emerging Market Index jumped 2.2%.
The Bloomberg Dollar Spot Index dipped 0.1% and the euro advanced 0.1% to $1.133. The British pound also gained 0.2% to $1.2635 and the Japanese yen weakened 0.1% to 107.43 per dollar. The South Korean Won strengthened 0.8% to 1,207.10 per dollar.
The yield on 10-year Treasuries climbed one basis point to 0.73% and the yield on two-year Treasuries advanced less than one basis point to 0.19%.
While Germany’s 10-year yield advanced two basis points to -0.43%, Britain’s 10-year yield gained two basis points to 0.225%.
While Brent crude increased 1.5% to $40.32 a barrel, gold strengthened 0.3% to $1,730.31 an ounce and LME aluminium surged 1.5% to $1,600 per metric ton, the biggest jump in more than four weeks.