By Marc Jones and Wayne Cole
LONDON / SYDNEY (Reuters) – Europe stocks added to their best gains in almost a month as security plays lost its luster on Wednesday, with hopes of a rapid economic recovery a firm position against an upsurge global coronavirus case.
Data has shown that US retail sales rebounded strongly in May, but new infections have peaked in six US states and China cutting flights and closing schools to contain another Beijing outbreak .
The theme of a strong global economic recovery “, will have to be balanced against the 2nd wave COVID risks which are more difficult to assess, and we support investors assumed to be perhaps more modest than in reality”, said MUFG director from Derek Halpenny’s Research.
Politics too is lurking as a concern with India reporting that 20 of its soldiers have been killed in clashes with Chinese troops at a disputed border site, while North Korea has rejected a South Korean offer to send special envoys and said he would redeploy troops to the border.
It was enough to inject some caution into the trade.
reduced by 0.5%, after an increase of nearly 5% on Tuesday, for its biggest daily gain in three months.
Europe saw its start of 1% gains trimmed almost in half (), but all major indices were firmly in positive territory, and the US S&P 500 futures pushed higher after spending most of the Asian session to doubt on either side of the television. ()
The results of the trial announced Tuesday showed dexamethasone, used to reduce inflammation in other diseases such as arthritis, reducing death rates by about a third among the most seriously ill COVID-19 patients admitted to hospital.
“This is one of the best pieces of news we have had throughout the crisis,” Britain’s Health Secretary Matt Hancock said.
0.2% higher MSCI of the World stocks analyzed index, having climbed 2.2% the previous day, recovering much of the ground lost last week.
Chinese blue chips recovered from a stable start to finish bath. Who followed a solid session on Wall Street for the night. The Dow ended Tuesday up 2.04%, while the S&P 500 gained 1.90% and the Nasdaq 1.75%.
Hopes for recovery was supported by data showing that US retail data sales jumped by a record 17.7% in May, recovering more than half of the losses of the previous two months, though industrial production has still been lagging behind.
Trump’s administration has also been suspected of preparing a $ 1 trillion infrastructure package, something that was originally promised over three years.
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“There is little doubt that the global economy will bottom out in April and is about to post growth rate records compared to May and June, sharply lifting Q3 GDP above its 2Q depression,” wrote economists at JPMorgan (NYSE :).
“But questions about the extent of the lasting damage will have to wait several months before being resolved. ”
Federal Reserve Chairman Jerome Powell warned that production and employment will remain far below their pre-pandemic levels for a long time, so there is a “reasonable probability” that more policy support would be required .
All the talk of resumption of charge due to headwinds for sovereign bonds, although the US Treasury bills did not recover part of the losses recorded in Asia.
Thirty years, yields were up 2 basis points to 1.55%, after increasing more in a month on Tuesday, and at 10 years of age, the German Bunds led to a flurry of similar ups in Europe the advance of 5 billion euros from the sale of bonds.
“The tension between economic data and the rise in COVID-19 cases continues to fuel market volatility,” said Antoine Bouvet, senior strategist at ING London.
The dollar has rebounded slightly, from a recent three-month low to hold at 96,978 against a basket of currencies.
The dollar was up against the Japanese yen at 107.40, while the euro stood at $ 1.1268 from its recent high of $ 1.1422.
In the commodities markets, gold has been frozen at $ 1,725 and well within the $ 1,670 / $ 1,764 range in recent weeks.
Oil price gains slowed amid rising inventories. They had climbed 3% on Tuesday after the International Energy Agency (IEA) raised its forecast for oil demand by 2020. [O/R]
Futures swung 1% above $ 41.35 a barrel, while US crude rose 16 cents to $ 38.54.