China stocks gain, dollar edges down; gold slips: markets wrap

Stocks in China climbed after the central bank’s injection of cash raised hopes of more supportive monetary policy, with equities elsewhere trading mixed as investors assessed soured US-China ties. The dollar slipped.

The Shanghai Composite was more than 2% higher after the People’s Bank of China boosted liquidity in the financial system to support banks. Hong Kong also rose. Equities in Japan and Australia were lower along with European equity futures. S&P 500 contracts rose and crude oil climbed. Gold fell, building on last week’s slide. Treasuries were steady, with the 10-year yield at 0.70%.

The US and China postponed talks planned for over the weekend that had been aimed at reviewing progress at the six-month mark of their phase-one trade agreement, people familiar with the matter said. Friction continues between the two powers amid President Donald Trump’s re-election campaign. Trump on Friday officially ordered the Chinese owner of the popular music video app TikTok to sell its US assets, citing national security grounds.

The nearly 50% recovery in global equities since the March lows has left an MSCI gauge close to its all-time high as investors bet central banks and governments will keep providing support for ailing economies trying to rebound from virus shutdowns. Minutes due to be released on Wednesday from the Federal Reserve’s most recent policy meeting may yield clues about whether officials plan to introduce new language in September.

“The economy is going to continue to reopen as we move into the end of this year,” Brett Ewing, chief market strategist at First Franklin Financial Services, said on Bloomberg TV. “If you can buy into that story, you need to be ahead of money flowing into these value and cyclical stocks — if you wait for a vaccine to come out, you’re going to be missing probably the biggest opportunity right now.”

Elsewhere, the New Zealand dollar was little changed as the country’s election was delayed due to a worsening coronavirus situation.

Here are some key events coming up:

• Earnings include Alibaba, JD.com, Walmart, Home Depot, BHP Group, Nvidia and Qantas.
• The EIA’s crude oil inventory report comes out Wednesday.
• US jobless claims for the week ended August 15 are due Thursday.
• China’s loan prime rate is due Thursday.
• On Friday come euro-area PMIs.

These are the main moves in markets:

Stocks

• Futures on the S&P 500 Index added 0.3% as of 5:30 a.m. in London.
• Japan’s Topix index fell 0.6%.
• Hong Kong’s Hang Seng added 1.3%.
• Shanghai Composite rose 2.3%.
• Australia’s S&P/ASX 200 Index declined 0.7%.
• Euro Stoxx 50 futures fell 0.2%.

Currencies

• The yen gained 0.1% to 106.54 per dollar.
• The offshore yuan traded at 6.9373 per dollar, up 0.1%.
• The euro bought $1.1859, up 0.1%.
• The Bloomberg Dollar Spot Index slipped 0.1%.

Bonds

• The yield on 10-year Treasuries dipped to 0.70%.
• Australia’s 10-year yield was at 0.91%.

Commodities

• West Texas Intermediate crude rose 0.8% to $42.34 a barrel.
• Gold fell 0.2% to $1,941.60 an ounce.

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