Stocks in Europe, Asia rise as futures edge higher; oil gains

Bloomberg

Stocks rose in Europe and Asia and US equity futures edged higher as investors weighed positive signs on stimulus and the global economy against worsening social unrest in America. Oil advanced.
The Stoxx Europe 600 Index opened in the green, with the DAX pacing gains as German Chancellor Angela Merkel seeks to thrash out a deal on a second stimulus package to help the country’s economy. Deutsche Lufthansa AG surged after the airline overcame most of the barriers to receiving a 9 billion euro ($10 billion) bailout from the government.
S&P 500 futures turned higher, erasing an earlier loss following President Donald Trump’s promise to deploy large numbers of troops if cities and states don’t act to contain violence from protests over police brutality. Benchmarks in Tokyo outperformed, while gains were more muted in Seoul, Sydney and Hong Kong. The dollar slipped and Treasuries were steady.
Investors have driven stocks up to three-month highs as businesses reopen around the world and manufacturing gauges show economies stabilising following coronavirus shutdowns. But a slew of risks remain, including tense US-China relations that may jeopardise a hard-won trade deal. The sometimes violent demonstrations across US cities over the killing of George Floyd, an unarmed black man, are adding to concerns.
“The main focus once again appears on the longer-term prospects of the easing of lockdowns across the world, though if the violence on US streets continues for much longer, US investors might have to cope with a lockdown of a different kind, imposed by the National Guard,” said Michael Hewson, an analyst at CMC Markets.
Elsewhere, oil gained as investors assessed whether Opec and its allies will extend the supply curbs that helped drive prices higher.
In Europe, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases at a meeting on Thursday. Anything less than an expansion would be a big shock, Bloomberg Economics said.
The US labour market report on Friday will probably show American unemployment soared to 19.6% in May, the highest since the 1930s.
While futures on the S&P 500 Index climb 0.3% as of 9:23 am London time, the Stoxx Europe 600 Index gains 1.4% and the MSCI Asia Pacific Index gained 0.9%. The MSCI Emerging Market Index also increased 0.8%.
The Bloomberg Dollar Spot Index declined 0.2% and the euro increased 0.2% to $1.1156.
The British pound jumped 0.3% to $1.2532. while the onshore yuan strengthened 0.3% to 7.111 per dollar, the Japanese yen weakened 0.2% to 107.76 per dollar.
The yield on 10-year Treasuries increased less than one basis point to 0.66% and the yield on two-year Treasuries dipped less than one basis point to 0.15%. While Germany’s 10-year yield sank two basis points to -0.42%, Britain’s 10-year yield fell two basis points to 0.214%. Japan’s 10-year yield declined less than one basis point to 0.012%.
As West Texas Intermediate crude increased 1.2% to $35.86 a barrel, Brent crude gained 1.5% to $38.89 a barrel and gold weakened 0.1% to $1,737.52 an ounce.