US stock futures jump on China Trade Optimism: Markets Wrap
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U.S. stock futures climbed with European equities while Asian equities pared declines after China indicated it would not immediately retaliate against the recent US price hike. Treasuries slipped, while a dollar meter held near a nine-month high.
S&P 500 contracts turned higher next to the Stoxx Europe 600 index after a spokesman for China's trade ministry said escalation of the trade war would not benefit anyone, and that it was more important to discuss eliminating the additional fees . Shares across Asia trimmed down on the remarks. In Europe, Italy's bonds rose and shares outperformed as the country moved to form a new government. The Chinese mainland's yuan strengthened for the first time in 11 sessions, while the pound picked up Wednesday's decline in increasing the risk of a deal without Brexit.
The market sentiment is still delicate following President Donald Trump's recent statements on trade and as investors try to maintain optimism for a resolution. The latest comments from China follow those of Finance Minister Steven Mnuchin, who said US professionals expect Chinese dealers to visit Washington, although he would not say whether a previously scheduled September meeting would take place. White House adviser Peter Navarro played a quick resolution.
Meanwhile, the bond rally was paused after the return on 30-year US Treasuries fell to a record low of 1.9039% Wednesday. Mnuchin said issuance of ultra-long US bonds is "under severe scrutiny" in the Trump administration, possibly setting up a grip that would mark a historic $ 16 trillion market renewal.
Events to keep an eye on this week:
The second reading of US GDP in the second quarter of Thursday is expected to narrow estimates for slightly lower economic growth. The bank's policy decision and briefing is on Friday. Euro-zone CPI data for August is also due Friday.
Here are the key moves in the markets:
Shares
Futures on the S&P 500 index rose 0.9% from 6:19 a.m. in New York time. The Stoxx Europe 600 index rose 1.1%. Shanghai Composite Index fell 0.1%. The MSCI Emerging Market Index rose 0.1%.
Currencies
The Bloomberg Dollar Spot Index was little changed. Euro was stable at $ 1.1077. The British pound fell 0.1% to $ 1,2201. The yuan on land strengthened 0.2% to 7.15 per dollar. Japanese yen depreciated 0.1% to 106.21 per dollar.
Bonds
The return on 10-year government bonds advanced one basis point to 1.49%. The return on two-year government bonds advanced two basis points to 1.52%. Germany's 10-year return increased one basis point to – 0.71%. Britain's 10-year return fell less than one basis point to 0.44%. Japan's 10-year return fell by one basis point to -0.285%.
Commodities
West Texas Midwest rose 0.5% to $ 56.05 a barrel. Iron ore went down 1.1% to $ 80.50 per tonne. Gold climbed 0.1% to $ 1,540.22 an ounce.
– With the help of Min Jeong Lee and Andreea Papuc.
To contact the reporter about this story: Yakob Peterseil in London at ypeterseil@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Todd White
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