Equities and the future fall with the widening of the Chinese-American divide: the recovery of the markets

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(Bloomberg) – Stocks fell alongside US equity futures on Thursday as deteriorating Sino-US ties clouded the recent upturn in risky assets. T-bills rose with the dollar.

The Stoxx Europe 600 index opened lower with the 19 industry groups in the red. Contracts on the top three US stock gauges signaled a decline at the opening of Wall Street, a day after the US Senate overwhelmingly passed a bill that could prevent some Chinese companies from registering on the American stock exchanges. President Donald Trump has fueled tensions by tweeting criticism of Xi Jinping’s leadership. Asian stocks fell and the offshore yuan fell slightly on the eve of the biggest Chinese political rally of the year.

Concerns over the new tensions between the United States and China and the global cases reaching 5 million people are attracting the attention of investors with optimism about the reopening of economies and the progress of vaccines. AstraZeneca Plc has received over $ 1 billion in US funding to develop a Covid-19 vaccine. Meanwhile, US law could ban Chinese mega-companies like Alibaba Group Holding Ltd. and Baidu Inc. to be listed on the US stock exchanges.

“The markets may be far too accommodating because the China-US trade deal could be in jeopardy,” said Stephen Innes, chief global market strategist at AxiCorp. “The pandemic and the resulting severe economic downturn have made China’s trade commitment to the United States much more difficult to meet. “

Elsewhere, crude oil climbed for the sixth day after US inventories fell.

These are the main movements on the markets:

Stocks

The Stoxx Europe 600 index fell 0.9% at 8:24 a.m.London, the CAC 40 index in France fell 1.4%, and the S&P 500 outlook fell by 0 .7% .Nasdaq 100 index futures fell 0.6%. %.

Currencies

The Bloomberg Dollar Spot Index jumped 0.2%, while the euro fell 0.1% to 1.097, while the British pound fell 0.4% to $ 1.22. The Japanese yen fell 0.3% to 107.81 per dollar.

Obligations

The yield on 10-year Treasury bills fell by one basis point to 0.67%. The 10-year yield on Great Britain fell by two basis points to 0.207%. The spread on Italian bonds at 10 years compared to those of Germany climbed two basis points to 2.126 percentage points.

Raw materials

West Texas Intermediate crude rose 1.9% to $ 34.13 a barrel. Gold fell 0.6% to $ 1,737.02 an ounce.

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