U.S. Futures Climb as Oil Touches Five-Month Low: Markets Wrap

Equity markets started Monday with gains as investors prepared for a crucial week spanning the U.S. election and a Federal Reserve meeting.Futures on the S&P 500 climbed 1% following last week’s sharp selloff. Equity benchmarks across Europe and Asia were also higher, and investors took comfort in data that showed strength in China’s economic expansion.

Dunkin’ Brands Group Inc. rallied 6.2% in U.S. pre-market trading after agreeing to be acquired by private equity-backed Inspire Brands Inc. in a $11.3 billion deal, one of the largest transactions ever in the restaurant industry. Online grocery retailer Ocado Group Plc jumped 8% to lead gains in the Europe Stoxx 600 Index.

The picture wasn’t uniform across markets. Oil prices touched a five-month low after Libya accelerated production and the U.K. joined other European countries in toughening travel restrictions. Russia, which depends on crude as a key export, saw the ruble weaken to the lowest level since March against the dollar.

The main event this week will be Tuesday’s U.S. election, with Democratic nominee Joe Biden leading President Donald Trump in polls. Virus developments are also front and center, with daily cases continuing to surge in many parts of the world.

China continues to be a bright spot in the global economy. The Caixin China October manufacturing purchasing managers’ index rose to 53.6, the sixth month of expansion and the highest since 2011, according to data Monday.

“Whichever way you look at it, this coming week will be huge for U.S. and global markets,” said Simon Ballard, chief economist at First Abu Dhabi Bank PJSC. “We see the potential for a sharp rise in volatility around these events — and all in the context of a still deteriorating Covid-19 situation across much of the U.S., Europe and elsewhere.”

In other markets, gold advanced while the yield on 10-year Treasuries held at 0.86%. The Bloomberg Dollar Spot was little changed. The VIX Index, a measure of implied volatility in U.S. stocks, slid to 37.

Earlier on Monday, the calculation of equity benchmarks including the Stoxx Europe 600 Index was delayed by a technical glitch that lasted about an hour. Neither the cash market nor equity derivative trading were affected by the glitch.

These are some key events coming up:

• Earnings are due from companies including Nintendo Co., Macquarie Group Ltd., Toyota Motor Corp., Alibaba Group Holding Ltd. and AstraZeneca Plc.
• U.S. Presidential election on Tuesday.
• EIA crude oil inventory report on Wednesday.
• Fed policy decision on Thursday.
• The U.S. labor market report is due Friday.

Here are the main moves in markets:

Stocks

• Futures on the S&P 500 Index increased 1% as of 9:04 a.m. New York time.
• The Stoxx Europe 600 Index surged 1.4%.
• The MSCI Asia Pacific Index jumped 1.1%.
• The MSCI Emerging Market Index increased 0.8%.

Currencies

• The Bloomberg Dollar Spot Index was little changed.
• The euro was little changed at $1.1649.
• The British pound fell 0.1% to $1.2938.
• The Japanese yen was little changed at 104.64 per dollar.
• The offshore yuan strengthened 0.1% to 6.6869 per dollar.

Bonds

• The yield on 10-year Treasuries fell three basis points to 0.85%.
• The yield on two-year Treasuries was unchanged at 0.15%.
• Germany’s 10-year yield gained less than one basis point to -0.62%.
• Britain’s 10-year yield sank three basis points to 0.232%.
• Japan’s 10-year yield increased less than one basis point to 0.045%.

Commodities

• West Texas Intermediate crude declined 1.6% to $35.21 a barrel.
• Brent crude decreased 0.4% to $37.69 a barrel.
• Gold strengthened 0.6% to $1,890.31 an ounce.

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