Global shares head for one-month high on stimulus hopes

London/Sydney — World shares headed for a one-month high and oil and metal markets rallied on Thursday, as hopes for more US and global stimulus offset Europe’s rising numbers of coronavirus cases and lockdowns.

The pan-European Stoxx 600 index rose 0.4% and Wall Street futures were up 0.5%.

Signs that US President Donald Trump and House speaker Nancy Pelosi could still agree aid for airlines helped offset Trump’s ending talks for a bigger plan. The dollar was in the doldrums after the minutes of the US Federal Reserve’s last meeting showed backing for more support if required.

“We are still basically tracking risk appetite” said Ned Rumpeltin, the European head of currency strategy at TD Securities, pointing to the steady rise in stock markets as investors bide their time until the US election. “I wonder how long that can last.”

The euro was little changed. So were European government bond markets as the European Central Bank prepared to release later the minutes of its recent meeting.

The dollar barely moved against the yen at ¥106. The New Zealand dollar was the liveliest among G10 currencies, dropping as much as 0.5% after central bank officials again hinted they could introduce negative interest rates, though it had mostly recovered in Europe.

MSCI’s emerging-market currency index was at a month high thanks to decent gains for the Korean won, Mexican peso, Israeli shekel, Pakistani rupee and Hungarian forint, though Turkey’s battered lira fell to a record low.

The Turkish central bank is expected to support the lira, but doubts persist about how much it can do. It has already burnt through most of its reserves and the country is now involved in increasing numbers of geopolitical skirmishes.

Stormy times

In commodities, oil rose above $42 a barrel, supported by output shutdowns in the US Gulf of Mexico and the prospect of more supply losses in Norway, as well as by hopes for some US coronavirus relief aid.

Oil and gas workers have withdrawn from offshore US Gulf production facilities as Hurricane Delta was forecast to intensify into a category 3 storm. Nearly 1.5-million barrels of daily output was halted.

Brent crude rose 59c, or 1.4%, to $42.58 a barrel, after falling 1.6% on Wednesday. US West Texas Intermediate added 45c, or 1.1%, to $40.40 after falling 1.8%.

“If Delta stays weak, the oil rally could quickly run out of steam,” said Jeffrey Halley, analyst at brokerage Oanda.

Gold had shaken off some weakness in Asia and was last up 0.2% at $1,886 per ounce, leaving it nearly 25% higher for the year.

Reuters