Global stocks rally with oil on Covid vaccine progress

Bloomberg

Global stocks, US equity futures and oil advanced as AstraZeneca Plc said its vaccine prevented most people from
developing Covid-19.
Energy and banking shares led markets higher in Europe, while South Korea’s stocks hit a record. Credit Agricole SA climbed 4.2% after agreeing to buy an Italian lender Credito Valtellinese for about 737 million euros ($875 million).
Vaccine announcement has added to the risk-on mood in markets as investors looked forward to the end of the pandemic. Oil futures in New York rose past $43 a barrel after capping their third straight weekly gain. Treasuries and gold were little changed, while the dollar weakened against its major peers.
While global stocks are hovering near all-time highs, investor optimism is being tempered by the continuing surge in coronavirus cases. The Greater Los Angeles area plans to limit restaurants to pick-up and delivery after infections surged, and China reported sporadic cases in Tianjin, Shanghai and Inner Mongolia.
“As soon as we can get
something that is very effective distributed widely, the sooner we can get back to ordinary
life,” Brian Jacobsen, multi-asset strategist at Wells Fargo
Asset Management, said on Bloomberg TV. “The problem, from our perspective, is we first have to get through winter and this is setting us up for some downside economic surprises.”
There are growing predictions the Federal Reserve will unveil more monetary action when it meets in mid-December. That view comes after the central bank said it will comply with a Treasury Department request to return unused funds meant to backstop five emergency lending programs.
Minutes of the most recent Federal Open Market Committee meeting are due on Wednesday. US jobless claims, GDP and personal spending data come on Wednesday. UK expected on Wednesday to deliver the government’s spending plans for next year. Thursday sees a policy decision and briefing from the Bank of Korea. US celebrates the Thanksgiving holiday on Thursday.
The weekends with Black Friday, the traditional start of the US holiday shopping season.
Futures on the S&P 500 Index increased 0.4% in London. The Stoxx Europe 600 Index gained 1.2%. The MSCI Asia Pacific Index gained 0.6%. The MSCI Emerging Market Index increased 1.7%.
The Bloomberg Dollar Spot Index fell 0.1% to 1,145.54. The euro gained 0.1% to $1.1869. The British pound rose 0.6% to $1.3361. The Japanese yen strengthened 0.1% to 103.78 per dollar.
The yield on 10-year Treasuries climbed one basis point to 0.84%. The yield on two-year Treasuries dipped less than one basis point to 0.16%. Germany’s 10-year yield fell one basis point to -0.58%. Britain’s 10-year yield declined less than one basis point to 0.321%.
West Texas Intermediate crude rose 0.6% to $42.15 a barrel. Gold strengthened 0.3% to $1,871.51 an ounce.

Dollar falls to 2018 lows over vaccine progress
Bloomberg

The dollar dropped to a two-and-a-half year low as fast-tracked plans to roll out a coronavirus vaccine in the US bolstered appetite for risk assets.
The Bloomberg Dollar Spot Index fell as much as 0.2% to an April 2018 low after US officials said vaccinations may start in less than three weeks. New Zealand’s dollar, the pound and the Norwegian krone led gains against the greenback in Asia trading on Monday. “The vaccine news is favouring the view of a sooner-rather-than-later global economic recovery with the USD losing its safe haven appeal along the way,” said Rodrigo Catril, a currency strategist at National Australia Bank Ltd in Sydney.
“This is a risk-positive, USD-negative backdrop, especially with the Fed likely to remain ultra-dovish for some time.”
The dollar has fallen more than 11% from its record high in March as investors cheer the prospect of a viable vaccine and prospects of improving global growth. Morgan Stanley recommends selling the dollar in favor of stocks and credit, while Goldman Sachs Group prefers shorting the US currency against developing nation peers including the Mexican peso and South African rand.