Asian Stocks Climb, Yuan Up on Trade, Virus Hope: Markets Wrap

Asian stocks climbed Tuesday after U.S. equities rose to a record on optimism about treatments for the coronavirus. The offshore yuan strengthened after Washingtonsaid both China and the U.S. see progress on their trade pact.

Stocks rose in Japan, Australia and South Korea. S&P 500 futures edged up after the benchmark notched another all-time high, with companies that benefit from a more robust economic recovery leading gains. The Nasdaq Composite closed at a record for a second straight session. Treasuries were steady and the dollar dipped.

Investors have turned their focus to the potential for vaccine developments as economies reopen. Moderna Inc. said it’s near a deal to supply at least 80 million vaccine doses to the European Union, as the spread of cases accelerates across Europe. That comes after U.S. President Donald Trump said a treatment based on blood plasma donated by people who’ve recovered from Covid-19 will be expanded.

“A steady flow of progress with COVID-19 treatments/vaccines is delivering the latest boost to risk appetite,” Edward Moya, senior market analyst at OANDA, said in a note. He cautioned that “market breadth however does not support the surge to record high territory for U.S. indexes.”

Meanwhile, U.S. and Chinese officials spoke about the phase-one trade pact. Both sides see progress and are committed to the success of the agreement, the U.S. Trade Representative said in a statement. Traders are also awaiting Federal Reserve Chair Jerome Powell’s scheduled speech on Thursday about the Fed’s long-awaited monetary policy framework review, which has focused on a new inflation strategy.

Elsewhere, oil pulled back as traders eyed Tropical Storm Laura, which is expected to strengthen into a hurricane before making landfall later this week. Gold traded below $1,950 an ounce.

Here are some key events coming up:

  • Earnings from companies including, ICBC, PetroChina, HP Inc., Royal Bank of Canada, Best Buy and Dollar General.
  • The U.S. Republican National Convention begins Monday.
  • The Bank of Korea sets monetary policy and will hold a briefing on Thursday.
  • Fed Chair Jerome Powell speaks at event on Thursday.

These are the main moves in markets:

Stocks

  • S&P 500 futures rose 0.3% as of 10:00 a.m. in Tokyo. The S&P 500 Index climbed 1%.
  • Topix Index rose 1.2%.
  • Kospi Index was up 0.9%.
  • S&P/ASX 200 rose 0.7%.

Currencies

  • The Japanese yen was at 105.98 per dollar.
  • The offshore yuan rose 0.1% to 6.9050 per dollar.
  • The Bloomberg Dollar Spot Index fell less than 0.1%
  • The euro was at $1.1789, little changed.

Bonds

  • The yield on 10-year Treasuries was flat at 0.65%.

Commodities

  • West Texas Intermediate crude fell 0.3% to $42.51 a barrel.
  • Gold rose 0.1% to $1,930 an ounce.

— With assistance by Claire Ballentine, and Sarah Ponczek

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