Stocks jump as risk returns from UK to Hong Kong: Markets Wrap

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U.S. Stock index futures rally alongside European and Asian stocks on Wednesday as traders cheered for a relief in political tensions from Rome and London to Hong Kong. Treasuries and gold withdrew, while the dollar slipped.

Contracts for the three major US equity meters jumped, and signal stocks will resume from Tuesday's fall. All industry groups in the Stoxx Europe 600 Index advanced, almost erasing the meter's August decline. Manufacturers of luxury goods that depend on sales in Hong Kong, including Richemont and Swatch, climbed alongside shares in Italy, where a new political coalition took shape that could be more conciliatory to the EU.

Stocks in Hong Kong jumped most since 2018, driving up stocks across Asia, after the leader Carrie Lam took office, saying she formally withdrew the law to allow extractions to China, the detonator for three months of often violent protests. In the UK, the pound rose as stocks rose and gilts fell after Parliament took a decisive first step to block a Brexit without a deal. Euro-advanced and most European bonds fell.

Traders rush back to riskier assets as event risk seems to wane, from a possible Chinese slump in Hong Kong to confrontations between the EU and two of its biggest members. At the same time, investors are on the lookout for any news about China-U.S.A. trade talks, with officials from both countries struggling to agree on the next step after Washington rejected Beijing's request to postpone tariffs that went into effect this weekend.

Elsewhere, oil futures climbed and the yuan on land rose after a stronger-than-expected daily currency fix. In the United States, with Florida orange groves seemingly escaping major damage from Hurricane Dorian, the concern now faces soy, grain and cotton fields as well as livestock in Georgia and the Carolinas as the storm plunges north.

Here are some key events to come up:

Bank of England Governor Mark Carney speaks to the Treasury Committee Wednesday along with colleagues Andy Haldane, Jonathan Haskel and Gertjan Vlieghe, on the bank's August inflation report; he will then appear alone to discuss Britain's economic relationship with the EU. Speakers this week include New York Fed's John Williams on Wednesday and Fed leader Jerome Powell on Friday. The United States Labor Report on Friday is estimated to show that non-farm wage levels rose by 160,000 in August, compared with 164,000 the month before. The projections are that unemployment should be steady at 3.7% and the average hourly wage increase to 3.0%.

These are the most important features of the markets:

Stocks

The Stoxx Europe 600 index advanced 0.9% from 8:27 a.m. in New York time. The S&P 500 index rose 0.9%. The UK's FTSE 100 index rose 0.4%. The MSCI All-Country World Index rose 0.5%. MSCI Emerging Market Index jumped 1.5%

Currencies

Bloomberg Dollar Spot Index fell 0.4%. The euro gained 0.4% to $ 1.1018. The British pound rose 1% to $ 1,2198. The Japanese yen depreciated 0.3% to $ 106.26 per dollar.

Bonds [19659015] The return on 10-year government bonds climbed four basis points to 1.50%. The yield on two-year government bonds increased two basis points to 1.47%. Britain's 10-year yield jumped 10 basis points to 0.504%. Germany's 10-year return climbed six basis points to -0.65%. Japan's 10-year return rose one basis point to -0.277%.

Commodities [19659017] Intermediate crude oil in West Texas advanced 2.4% to $ 55.21 per barrel. Gold fell 0.6% to $ 1,538.59 per gram. Iron ore gained 2.8% to $ 88.15 per tonne.

– With help from Adam Haigh and April Ma. [19659019] To contact the reporter about this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Samuel Potter at spotter33 @ bloomberg.net, Todd White

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