Stocks, futures, yuan climb on trade, virus hope: markets wrap

US and European futures climbed alongside most Asian stocks Tuesday on optimism about treatments for the coronavirus and signs of progress on trade negotiations. The offshore yuan strengthened and the dollar slipped.

Stocks rose in Japan, Australia and South Korea, fluctuated in China and dipped in Hong Kong. S&P 500 futures advanced after the benchmark notched another all-time high, with companies that benefit from a more robust economic recovery leading gains. The Nasdaq Composite closed at a record for a second straight session. Ten-year Treasury yields ticked higher, while their Chinese counterparts rose the most in seven weeks.

The US and China spoke about the phase-one trade pact. Both sides see progress and are committed to the success of the agreement, the US Trade Representative said. Trade between the world’s largest economies has emerged as a rare area of cooperation in otherwise tense bilateral ties.

Investors are also focused on vaccine progress as economies reopen. Moderna Inc. said it’s near a deal to supply at least 80 million vaccine doses to the European Union. President Donald Trump said a treatment based on blood plasma donated by people who’ve recovered from Covid-19 will be expanded.

“A steady flow of progress with Covid-19 treatments/vaccines is delivering the latest boost to risk appetite,” Edward Moya, senior market analyst at OANDA, said in a note. He cautioned that “market breadth however does not support the surge to record high territory for US indexes.”

Traders are also awaiting Federal Reserve Chair Jerome Powell’s scheduled speech on Thursday about the Fed’s long-awaited monetary policy framework review, which has focused on a new inflation strategy.

Oil pulled back as traders eyed Tropical Storm Laura, which is expected to strengthen into a hurricane before making landfall later this week. Gold traded below $1,950 an ounce.

Here are some key events coming up:

• Earnings from companies including ICBC, PetroChina, HP Inc., Royal Bank of Canada, Best Buy and Dollar General.
• The US Republican National Convention begins Monday.
• The Bank of Korea sets monetary policy and will hold a briefing on Thursday.
• Fed Chair Powell speaks at an event on Thursday.

These are the main moves in markets:

Stocks

• S&P 500 futures rose 0.5% as of 1:06 p.m. in Tokyo. The S&P 500 Index climbed 1%.
• Topix Index rose 1.6%.
• Kospi Index was up 1.5%.
• S&P/ASX 200 rose 0.4%.
• Hang Seng Index dipped 0.5%.
• Shanghai Composite Index fell 0.2%.

Currencies

• The Japanese yen was at 105.96 per dollar.
• The offshore yuan rose 0.1% to 6.9054 per dollar.
• The Bloomberg Dollar Spot Index fell 0.2%
• The euro was at $1.1813, up 0.2%.

Bonds

• The yield on 10-year Treasuries was at 0.66%.

Commodities

• West Texas Intermediate crude fell 0.1% to $42.58 a barrel.
• Gold rose 0.4% to $1,937 an ounce.

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