European Stocks Advance With Oil, Banks on US Stimulus Bets

Marco Green
August 11, 2020

"The main focus for markets is whether the USA can agree on the next round of fiscal stimulus", said Benjamin Jones, a senior multi-asset strategist at State Street Bank. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.

The Australian dollar was subdued, down 0.1% versus the USA dollar at 0.71525, after the country recorded a record-high daily increase in COVID-19 deaths on Monday.

SYDNEY/HONG KONG, Aug 10 (Reuters) - Asian stocks held tight ranges on Monday as worries over flaring tensions between the United States and China weighed on sentiment, although signs of a recovery in industrial activity in the world's second-largest economy capped losses.

However, after Trump on Saturday signed measures including handing Americans up to $400 a week extra in their unemployment benefits and protection from evictions, observers said that there was hope that politicians would work harder to reach a deal.

The Dow rose 1% and the S&P 500 inched ahead, while the Nasdaq sold off a little as investors trimmed some tech holdings in favour of value stocks.

The Stoxx Europe 600 Index gained 0.2% at the open, led by banks and miners.

At around mid-session, stock prices in London and Paris were 0.4 per cent higher, while Frankfurt stocks edged up by around 0.2 per cent.

Earlier, Asian shares outside Japan seesawed in holiday-thinned trade, staying below a six-and-a-half-month peak touched last week.

Brent crude futures were last up 0.47% at US$45.20 a barrel and USA crude rose 0.76% to US$42.26.

But the backdrop continued to be bearish for the dollar.

That left the dollar index at 93.35, having struggled on a slippery slope since late June.

"We think the fundamental backdrop that has provided support for the USA dollar in the past two years is turning more adverse", said in a note Shaun Osborne, chief FX strategist at Scotiabank in Toronto.

In currencies, the dollar fell against the safe haven Japanese yen to 105.79 while the risk sensitive Aussie dollar nursed its losses after falling 1.1% on Friday. "But the longer-term outlook continues to be great on the euro, so you'll see people buying on dips", he added. "So we're getting some stimulus, but not enough", said Ed Moya, senior market analyst at OANDA in NY. "The question is, is that stall going to turn into more of a pause, or a more ominous retrenchment?"

"We think the fundamental backdrop that has provided support for the USA dollar in the past two years is turning more adverse and investors will continue to seek better economic prospects or returns in non-U.S. dollar markets in the coming months", Osborne wrote in his latest research note.

The 30-year bond last fell 21/32 in price to yield 1.2544%, from 1.229%.

On the mainland, the Shanghai Composite was 0.75% firmer at 3,379.25, and the smaller, technology-heavy Shenzhen Composite was 0.21% higher at 2,277.42.

U.S. President Donald Trump signed executive orders banning Chinese social media platforms WeChat - owned by Chinese tech giant Tencent - and TikTok starting next month, and imposed sanctions on 11 Hong Kong and Chinese officials.

Other reports by Click Lancashire

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