U.S. Futures Rise on Stimulus Hope; Bonds Fall: Markets Wrap

U.S. futures advanced amid fresh optimism about progress on stimulus talks in Washington. Treasuries slipped along with the dollar.

S&P 500 Index contracts pointed to gains at the open after the gauge closed higher for a third week on Friday. Speaker of the House Nancy Pelosi set a Tuesday deadline for more progress with the White House on a fiscal deal after lengthy discussions over the weekend with Treasury Secretary Steven Mnuchin.

AMC Entertainment Holdings Inc. surged as much as 8.9% in pre-market trading after it said it would reopen cinemas in upstate New York and Long Island.

In Europe, stocks fluctuated, with an earnings beat by Julius Baer leading banks higher and setting the pace for rivals. The pound jumped by the most since August as British officials signalled they were ready to water down controversial lawbreaking Brexit legislation, a move which could reopen talks with the European Union over future trading relationships.

While Pelosi said a pre-election deal remains possible, her team sent conflicting signals after setting a 48-hour deadline for progress on Saturday night. President Donald Trump renewed his offer to go beyond the dollar amounts now on the table.

“Given the Tuesday deadline set by Pelosi, the immediate threat for the pro-risk mood probably lies in Washington,” according to strategists at Scotiabank including Shaun Osborne. “Hope springs eternal for markets it seems, with investors remaining expectant that U.S. lawmakers can make headway on stimulus.”

Pelosi and Mnuchin spoke at length Saturday night about efforts to finalize a stimulus package to help the U.S. weather the affects of the coronavirus, especially as signs emerge of rising economic strain for millions of Americans and an acceleration in infections.

The U.S. had a fifth consecutive day of infections over 50,000. In Europe, Italy’s cases swelled to a daily record as the government prepares new containment measures.

Elsewhere, oil fluctuated before an OPEC+ meeting to assess the state of the market as demand comes under pressure from the threat of new virus restrictions.

Here are some key events this week:

• Brexit trade talks are likely to continue at least into next week if the U.K. and EU fail to reach an agreement.
• Australia’s central bank minutes are out Tuesday.
• The final presidential debate before the U.S. election, between President Donald Trump and former Vice President Joe Biden, will be live from Nashville, Tennessee on Thursday.

These are some of the main moves in markets:

Stocks

• Futures on the S&P 500 Index gained 0.8% as of 8:12 a.m. New York time.
• The Stoxx Europe 600 Index climbed 0.1%.
• The MSCI Asia Pacific Index rose 0.8%.
• The MSCI Emerging Market Index rose 0.5%.

Currencies

• The Bloomberg Dollar Spot Index decreased 0.4%.
• The euro climbed 0.6% to $1.1787.
• The British pound increased 0.7% to $1.3011.
• The onshore yuan strengthened 0.2% to 6.685 per dollar.
• The Japanese yen strengthened 0.1% to 105.31 per dollar.

Bonds

• The yield on 10-year Treasuries climbed two basis points to 0.77%.
• The yield on two-year Treasuries climbed one basis point to 0.15%.
• Germany’s 10-year yield gained one basis point to -0.61%.
• Japan’s 10-year yield jumped less than one basis point to 0.026%.
• Britain’s 10-year yield climbed two basis points to 0.201%.

Commodities

• West Texas Intermediate crude was little changed at $40.86 a barrel.
• Brent crude was little changed at $42.92 a barrel.
• Gold strengthened 0.9% to $1,915.52 an ounce.

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