By Marc Jones
LONDON (Reuters) – Global equities rose for a fourth straight day Thursday as encouraging coronavirus vaccine trials kept investors upbeat ahead of what was expected to be a record rebound in U.S. employment figures later.
Economists surveyed by Reuters expect 3 million more U.S. jobs to be added in June, on top of the 2.5 million created in May, and generally reassuring data from both Asia and Europe this week.
Despite the continued increase in cases of the virus worldwide, Asian stock markets experienced their largest daily rise in more than two weeks overnight, aided by news that a vaccine tested by Pfizer (NYSE:) and Germany’s BioNTech had been well tolerated in initial human trials. ()
Europe got off to a good start, with gains of 1-2% for its major stock markets in banking, travel and auto, and the euro helped to climb back up to $1.13 as the dollar fell further. /FRX] [/FRX]
“The big issue today is U.S. non-farm payrolls…but overall, the risk has been offered and the dollar has weakened,” said Alvin Tan, strategist with RBC FX.
“What really helped the feeling (in the last 24 hours) were some preliminary results on a vaccine”.
A vaccine for COVID-19, which has now killed more than half a million people worldwide and plunged the global economy into a deep recession, is long overdue.
As a sign that positive sentiment will continue, the S&P500 E-minis rose 0.8%, while bond markets also favoured risk over safety.
Germany’s 10-year Bund yield surpassed -0.4% for the first time in a week in its biggest daily jump in a month after euro-zone manufacturing data improved the day before, while Portugal’s borrowing costs reached their lowest level in three months. [GVD/EUR]
All major Asian indices have been optimistic. China’s index rose 2% and Hong Kong’s rose 2.8% as investors eased concerns over new security laws introduced by Beijing.
USE AGAINST THE VIRUS
Attention quickly turned to employment figures in the United States, which will later fuel the debate on whether the world’s largest economy can sustain its fragile recovery in the face of rising VIDC-19 cases in some key regions of the country.
“A better-than-expected result could help settle the short-term debate that the U.S. labour market will recover relatively quickly and justify new highs in U.S. equities,” said Stephen Innes, strategist at AxiCorp.
As for commodities, the most traded contract on the Shanghai Futures Exchange in August reached 49,570 yuan ($7,016.28) per ton, its highest level of the year.
The main copper consumer, China, posted better than expected manufacturing data in June, while U.S. manufacturing activity rebounded and German manufacturing contracted at a slower pace.
In Chile, where the number of cases of VID-19 increased, miner BHP said it would begin to slow production at its small copper mine in Cerro Colorado.
Oil prices rose and gold fell as encouraging macroeconomic data prompted investors to take more risk [O/R] [GOL/]
has risen 30 cents to $42.37 a barrel. has risen 35 cents to $40.17 a barrel. The United States fell 0.21 per cent to $1,776.20.
The dollar remained largely unchanged against the Japanese yen at $107.45. The euro rose to $1.1293, the British pound to $1.2520 and the risk-averse Australian and New Zealand dollars strengthened 0.3% and 0.5% respectively.