Stocks climb, dollar slips amid hopes for stimulus

Bloomberg

Global stocks climbed towards another record high as hopes for a US stimulus deal countered concern about a surge in coronavirus cases. Treasuries slipped with the dollar.
Cyclical banking and energy firms led European shares higher at the opening, after equities rose in much the Asia Pacific. Britain’s pound rallied as UK Prime Minister Boris Johnson was expected to travel
to Brussels for dinner on Wednesday with European Commission President Ursula von der Leyen to save Brexit trade negotiations.
Global equities were energised after the White House made a surprise re-entry into talks on a 2020 pandemic-relief package with a $916 billion proposal that opened a potential new path to a year-end deal. S&P 500 futures rose after the benchmark’s record close, though Nasdaq 100 contracts underperformed following the gauge’s 10th straight gain.
With little time left before the year-end break and no let-up Covid-19 cases in many of the biggest economies, investors are pegging their hopes on stimulus deal being struck in Washington and that regulators there grant emergency-use authorisation to Pfizer Inc’s vaccine as early as Thursday.
The opportunities are “in equities and credit, so we are overweight, we are risk on,” Richard Lacaille, global chief investment officer at State Street Global Advisors, said on Bloomberg TV.
“We know that we will be tested again next year in terms of Covid and elsewhere.”
A stimulus deal is far from certain, as US Democrats have opposed Senate Majority Leader Mitch McConnell’s insistence on giving employers a shield from lawmakers. He has been among Republicans blasting Democratic demands for assistance to state and local authorities as a bailout.
Elsewhere, the offshore yuan climbed past 6.5 per dollar for the first time since 2018. Machinery orders in Japan jumped at the fastest pace in more than a decade, adding to signs
that the global economy is continuing to recover from the pandemic. Chinese consumer prices declined for the first time since 2009.
Thursday brings the European Central Bank policy decision and a press briefing from Christine Lagarde. Economists widely expect the central bank to increase and extend its pandemic bond-buying program.
The US Food and Drug Administration meets to
discuss the vaccine made by Pfizer/BioNTech on Thursday. If the FDA authorises emergency use, Health & Human Services Secretary Alex Azar said vaccine distribution could begin within 24 hours.
The Stoxx Europe 600 Index increased 0.6% in London. Nasdaq 100 Index futures were little changed. Futures on the S&P 500 Index climbed 0.2%. The MSCI Asia Pacific Index gained 0.7%.
The Bloomberg Dollar Spot Index dipped 0.2%. The British pound gained 0.4% to $1.3415. The Japanese yen weakened 0.1% to 104.24 per dollar. The Taiwanese dollar was little changed at NT$28.51 per US dollar.
The yield on 10-year Treasuries increased two basis points to 0.94%. Britain’s 10-year yield gained two basis points to 0.278%. Germany’s 10-year yield gained one basis point to -0.60%. Japan’s 10-year yield advanced less than one basis point to 0.022%.
West Texas Intermediate crude increased 1% to $46.07 a barrel. Gold weakened 0.5% to $1,860.82 an ounce. LME zinc jumped 1.6% to $2,845 per metric ton. Platinum was little changed at $1,036.50 an ounce.