US futures advance with Europe stocks; oil gains

Bloomberg

US equity futures advanced with European stocks on Wednesday after signs emerged that China may be planning further measures to support its economy reeling from a virus-induced slowdown. The yen weakened.
Contracts on the three main US stock gauges pointed to a positive start on Wall Street after Bloomberg reported that China’s latest moves to aid growth include possible bail-outs for some airlines. The Stoxx Europe 600 Index headed towards a record close, with all 19 sectors in the green. Shares climbed in Tokyo, Hong Kong and Sydney, while Shanghai stocks dipped from their highest level in about four weeks. Treasuries edged higher along with European bonds.
Brent crude oil was set for the longest run of gains in a year as US sanctions on Russia’s largest producer and conflict in Libya shifted the focus to supply threats. The yen weakened against all of its major peers.
Investors appear relatively confident in the ability of policy makers to contain fallout from the deadly coronavirus, even after Apple Inc spooked markets earlier this week by warning of a slowdown in sales.
Beijing’s planned aid would support a particularly hard-hit industry, as global carriers have stopped about 80% of their China flights.
In the latest news on the virus, China’s Hubei province reported 132 new coronavirus fatalities for February 18, bringing the death toll on the mainland to over 2,000.
“It’s important to contextualise the impact of the virus — we’re not expecting a permanent cut in global growth,” Anne Anderson, head of fixed income at UBS Asset Management in Sydney, said on Bloomberg TV. “The combination of the fiscal-monetary and the belief that we will transition through this over the coming months mean we’re still on steady footing,” she said.
Elsewhere, gold climbed towards its highest level since 2013, while palladium extended its record-breaking rally on forecasts for a widening deficit.
Earnings season rolls on, with results from Deere & Co set for Friday. Minutes of the most recent Federal Reserve meeting are published on Wednesday. Indonesia is expected to cut interest rates on Thursday, following emerging-market peers that have already moved.
Group of 20 finance ministers and central bank chiefs are scheduled to meet on February 22-23 in Riyadh, Saudi Arabia, and are expected to discuss efforts to support growth amid the coronavirus threat.
Futures on the S&P 500 Index advanced 0.2% in New York. The Stoxx Europe 600 Index jumped 0.6%. The MSCI Asia Pacific Index increased 0.3%. The MSCI Emerging Market Index advanced 0.5%.
The Bloomberg Dollar Spot Index was little changed. The euro was little changed at $1.0795. The British pound fell 0.1% to $1.2981. The onshore yuan strengthened 0.1% to 6.993 per dollar. The Japanese yen weakened 0.5% to 110.39 per dollar.
The yield on 10-year Treasuries dipped one basis point to 1.55%. The yield on two-year Treasuries climbed less than one basis point to 1.41%. Germany’s 10-year yield declined one basis point to -0.42%. Britain’s 10-year yield sank one basis point to 0.597%. Japan’s 10-year yield gained one basis point to -0.047%.
West Texas Intermediate crude advanced 1.2% to $52.70 a barrel. Brent crude increased 1.2% to $58.44 a barrel.
Gold strengthened 0.6% to $1,610.46 an ounce.