US stock rally fades after surge in Asia, Europe; Treasuries rise

Bloomberg

A rebound in global stocks showed signs of fading in the US, with equities little changed after the best rally in two-and-a-half years.
The S&P 500 Index fluctuated after European and Asian equities rallied to catch up with march 26’s surge in the US, spurred by speculation the world will avoid an all-out trade war. The dollar strengthened on Tuesday as both the pound and euro retreated, while Treasuries rose.
The euro weakened as economic confidence in the region continued to slide in March.
Stock bulls were looking for another catalyst for gains after the S&P 500’s bounce higher from its 200-day moving average—a key trend line that’s proven to be a support level for the past two years. Traders were encouraged by signs that the US administration is pursuing dialogue with various countries in a bid to resolve simmering trade tensions.
“Our base case is that there won’t be an all-out trade war,” Craig
MacDonald, the global head of fixed income at Aberdeen Standard Investments, said. “It’s a way of applying pressure to get some wins by Trump.”
In Asia shares were green across the board, with Japan’s Topix Index jumping the most since November 2016. South Korea’s won was the best performer among major currencies as Kim Jong Un was said to be making an unannounced visit to Beijing, his first known trip outside North Korea since taking power in 2011.
Elsewhere, China’s currency touched the highest level in almost three years. The yield on India’s benchmark 10-year bond tumbled as the government surprised the market by reducing the size of its borrowing. Bitcoin edged higher, nearing the $8,000 level. And copper broke out of a three-day trading slump, climbing as much as 1.8 percent.
The big four euro-area economies are due to release March CPI readings this week. US personal income and spending data for February are due to be released on Thursday. The Treasury will probably auction about $294 billion of bills and notes this week, its largest slate of supply ever.
The S&P 500 was little changed in New York. The Stoxx Europe 600 Index surged 1.3 percent, the largest jump in almost seven weeks. The UK’s FTSE 100 Index surged 1.9 percent, the largest jump in 11 months. The MSCI Emerging Market Index gained 0.6 percent.
The Bloomberg Dollar Spot Index jumped 0.3 percent. The euro fell 0.4 percent to $1.2394, the biggest fall in a week. The British pound decreased 0.6 percent to $1.4142. The South Korean Won increased 1 percent to 1,070.43 per dollar, the strongest in a week on the largest climb in three weeks. The yield on 10-year Treasuries declined three basis points to 2.83 percent. Britain’s 10-year yield dipped two basis points to 1.41 percent. Germany’s 10-year yield decreased to 0.51 percent. West Texas Intermediate crude fell 0.1 percent to $65.46 a barrel. Gold sank 0.9 percent to $1,341.43 an ounce.