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U.S. equity futures climbed with Asia stocks on Thursday as signs of goodwill in the trade war boosted risk appetite. The euro reversed its gain and European shares turned higher as policy makers lowered interest rates and restarted stimulus.
Contracts on the three major U.S. gauges pointed to positive open on Wall Street, while shares climbed in most of Asia after President Donald Trump said he will delay the next tariff increase on China by about two weeks and following reports Beijing is considering American farm imports. Hong Kong equities dipped, weighed down by shares of the city’s exchange following a surprise takeover bid for its London counterpart. The yuan strengthened.
The Stoxx Europe 600 Index swung from a loss to a gain, the euro fell and bonds rallied after the European Central Bank cut its main rate to minus 0.5% as expected and said it would buy 20 billion euros of bonds a month. The pound drifted as Brexit confusion dragged on, with Prime Minister Boris Johnson winning a key legal victory in Northern Ireland a day after a Scottish court ruled against his decision to shutter Parliament.
The steps by China and the U.S. to ease tensions ahead of face-to-face talks in Washington in the coming weeks are helping support sentiment as investors await monetary policy decisions from more of the world’s major central banks. Trump said he was moving back a 5% increase in tariffs on a swathe of Chinese imports by two weeks, while Beijing may allow companies to resume purchases of U.S. agricultural products, according to people familiar with the situation.
“The quantum and nature of the changes mean they are more symbolic than substantial, but were still well received by investors,” said Michael McCarthy, chief market strategist at CMC Markets Plc in Sydney.
Following Thursday’s ECB gathering, the Federal Reserve is due to meet next week, with some traders paring expectations of accommodation and August’s bullish bond sentiment fading. They’ll be watching another key indicator for the world’s largest economy on Thursday: The core U.S. consumer price index, which excludes food and energy, is expected to show a gain of 2.3% in the 12 months through August — the biggest annual advance in a year.
Elsewhere, Turkey’s lira rallied after the central bank cut interest rates by more than was forecast. Oil fluctuated before turning lower as the International Energy Agency warned OPEC it faces a “daunting” surplus of crude in 2020.
Here are the main moves in markets:
Futures on the S&P 500 Index climbed 0.3% as of 7:55 a.m. New York time.The Stoxx Europe 600 Index increased 0.5%.The U.K.’s FTSE 100 Index advanced 0.2%.The MSCI Asia Pacific Index gained 0.5%.The MSCI Emerging Market Index jumped 0.6%.
The Bloomberg Dollar Spot Index was little changed at.The euro dipped 0.3% to $1.0972.The British pound was little changed at $1.2332.The Japanese yen gained 0.1% to 107.73 per dollar.
The yield on 10-year Treasuries decreased five basis points to 1.69%.Germany’s 10-year yield decreased seven basis points to -0.64%.Britain’s 10-year yield decreased six basis points to 0.58%.Italy’s 10-year yield decreased 17 basis points to 0.799%.
Gold gained 1.1% to $1,513.78 an ounce.West Texas Intermediate crude fell 1.1% to $55.16 a barrel.Silver gained 1.5% to $18.40 per ounce.
–With assistance from Sophie Caronello and Adam Haigh.
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