The dollar extended recent declines as traders squared positions ahead of year-end. Asian stocks, U.S. and European futures were mixed amid fading prospects for bigger government aid checks to individuals.
Shares saw strong gains in Hong Kong, China and South Korea, and S&P 500 futures pointed modestly higher. Stocks retreated in Japan and Australia alongside European contracts. Volumes were thin across major markets before the end of the year. Earlier, U.S. equities closed with a slight decline as Senate Republicans blocked an attempt by Democrats to increase direct payments to individuals to $2,000 from $600. An index of small cap shares tumbled almost 2%. Benchmark Treasuries were little changed and oil edged higher.
With a volatile year coming to a close, risk assets such as stocks, corporate bonds and Bitcoin are sitting just off record highs. As investors try to assess the impact of the pandemic and the pace of vaccine distribution, the MSCI AC World Index of global stocks is set to end the year about 14% higher, having surged almost 68% since its March low.
“This is an economy that is recovering, policy is going to be accommodative for years to come, it suggest a good backdrop for risk assets – it doesn’t mean there aren’t going to be some challenges as we progress over the next couple of years,” Brian Levitt, Invesco global market strategist, said on Bloomberg TV. “The reality is the markets are going to be focused on a recovery.”
On the coronavirus front, the Covid-19 variant discovered in the UK. has arrived in Colorado, and a second cluster of infections emerged in Sydney. President-elect Joe Biden criticized vaccine-distribution efforts under President Trump as too slow. UK. Prime Minister Boris Johnson has approved placing further swathes of the country into stricter Tier 4 restrictions, according to the Times.
Here are some key events coming up:
- U.S. pending home sales and goods trade balance data are due Wednesday.
- U.S. initial jobless claims figures are published Thursday.
- Most global stock markets are closed Friday for New Year’s Day.
These are the main moves in markets:
- S&P 500 futures rose 0.3% as of 7 a.m. in London. The S&P 500 Index fell 0.2%.
- Topix index fell 0.8%.
- Australia’s S&P/ASX 200 Index fell 0.3%.
- South Korea’s Kospi index rose 1.9%.
- Hong Kong’s Hang Seng Index rose 1.5%.
- Shanghai Composite Index rose 1.1%.
- Euro Stoxx 50 futures fell 0.3%.
- The yen was at 103.33 per dollar, up 0.2%.
- The offshore yuan traded at 6.5077 per dollar, up 0.2%.
- The Bloomberg Dollar Spot Index sank 0.3%.
- The euro rose 0.3% to $1.2280.
- The British pound rose 0.3% to $1.3538.
- The yield on 10-year Treasuries was little changed at 0.94%.
- Australia’s 10-year bond yield rose more than one basis point to 0.98%.
- West Texas Intermediate crude gained 0.4% to $48.21 a barrel.
- Gold rose 0.2% to $1,882 an ounce.
— With assistance by Vildana Hajric