US stocks rise as risk-on creeps back, dollar falls; Italy bonds up

Bloomberg

A degree of risk appetite returned to global markets on Tuesday, with developing-nation stocks and currencies rebounding and Italian bonds climbing. The dollar fell as Treasury yields climbed, and the pound advanced.
US equity futures pointed to a higher open and the Stoxx Europe 600 Index nudged upward after the MSCI Asia Pacific gauge eked out a gain in a mixed session earlier. Emerging stocks were the stand out, ending a three-day losing streak. The euro fluctuated as investors weigh the chances Italy’s president will seek to curtail a potential populist government, while the country’s bonds rebounded from a two-day slide. The Turkish lira fell to yet another record low. Sterling strengthened amid speculation there could be another UK election and after upbeat comments from a Bank of England policymaker.
Easing trade tension between the world’s two biggest economies has helped restore some confidence in emerging-market assets, though Italy’s political situation continues to loom over global markets. Beyond politics, central banks are in focus this week. The Federal Reserve will release minutes of its latest policy meeting on Wednesday, while the ECB follows suit on Thursday.
A raft of US debt sales adds to the busy agenda.
“Markets are going through a bumpy ride,” Bank of Singapore Investment Strategist James Cheo said on Bloomberg Television.
“This trade truce is still in the early days. It’s really a ceasefire, it’s not a peace treaty as yet. The implementation details are still unclear. There is still some caution.”
Elsewhere, the Chilean peso and South African rand led gains in emerging-market currencies. Hong Kong and South Korean markets were shut for a holiday. Most commodities, including oil, advanced as the greenback weakened.
Federal Reserve releases minutes of the central bank’s May 1-2 meeting on Wednesday; US new home sale also released as are euro-area and Japan PMIs. Thursday sees the Bank of England Markets Forum at Bloomberg London. Speakers include BOE Governor Mark Carney and New York Fed President William Dudley. At the St. Petersburg Forum Friday, Russian President Vladimir Putin and French President Emmanuel Macron, IMF Managing Director Christine Lagarde, and Japan Prime Minister Shinzo Abe participate on a panel moderated by Bloomberg News Editor-in-Chief John Micklethwait. Also Friday, European Union finance ministers discuss the latest on Brexit talks, in Brussels.
The Stoxx Europe 600 Index rose 0.2 percent in London. Futures on the S&P 500 Index rose 0.2 percent. The UK’s FTSE 100 Index rose 0.2 percent. Germany’s DAX Index rose 0.6 percent. The MSCI Emerging Market Index gained 0.6 percent. The MSCI Asia Pacific Index advanced 0.2 percent.
The Bloomberg Dollar Spot Index decreased 0.2 percent. The euro climbed less than 0.05 percent to $1.1793. The British pound increased 0.2 percent to $1.3448. The Japanese yen climbed 0.2 percent to 110.84 per dollar. The Turkish lira sank 1.4 percent to 4.6421 per dollar, the weakest on record.
The yield on 10-year Treasuries climbed one basis point to 3.07 percent. Germany’s 10-year yield increased three basis points to 0.55 percent. Italy’s 10-year yield declined four basis points to 2.348 percent, the largest drop in more than a week.
West Texas Intermediate crude increased 0.3 percent to $72.46 a barrel, the highest in three years.