By Tom Westbrook
Singapore (Reuters) – Japanese stocks rose to a six-month high, and the dollar was under pressure on Thursday as investors chose positive results from the latest economic data and bet on China and the United States, adhering to their trade deal at a crucial meeting over the weekend .
The rally followed Wednesday’s gains in Europe and on Wall Street – leaving the S&P 500 () within a record-breaking mustache. But futures prices suggest that the last round of optimism could lose steam on European Day.
Euro STOXX 50 () futures were last down 0.1%, futures () were down 0.7% and S&P 500 () futures were down 0.1%.
“People are watching the glass half full and testing the waters,” said Bank of Singapore currency analyst Moh Siong Sim.
Throughout the week, U.S. bond sales as investors took the largest 10-year paper auction raised yields enough to trigger a sharp recovery in gold, as well as a drop in the yen as flows came from Japan.
At the same time, the number of new COVID-19 infections in the United States appears to be stabilizing at around 55,000, and the unexpected jump in consumer prices last month appears to boost recovery confidence.
On Thursday, 10-year yields in the US () fell a touch to 0.6638%, gold
But the scale and pace of stock market profits are beginning to raise several concerns. OCBC analysts at Singpor are concerned that the stress index, which started in April, has done nothing but change.
“The stress on the market … has subsided to such a low level that we are beginning to wonder if we are missing something,” wrote OCBC economist Wellian Wiranto.
“With that in mind, we are increasing tensions between the United States and China, which may become clearer,” he said.
The next flashpoint is likely on Saturday, when senior officials meet to review the progress of the Phase 1 trade pact.
White House economic adviser Larry Kudlow said this week’s deal was “good at the moment,” comments that helped the yuan hit a five-month high on Thursday as a sign of confidence in the market.
However, China is lagging behind in the purchase of agricultural goods and energy and, Bloomberg News reported on Wednesday, is likely to provoke other areas of growing conflict between the two countries during trade talks.
Elsewhere, the high spirits kept the pressure on the dollar wide. [FRX/]
Markets are still looking forward to a breakthrough in the fight for the next US stimulus package. The small sign of progress is not good for the US economy and helped the euro () return over $ 1.18 and sterling
The Australian dollar
Australia was also more advanced in regional stock markets, selling communications giant Telstra (AX 🙂 after falling profits, moving to the index ().
Korea’s Kospi () led to gains in other markets outside Japan, rising 0.7% to a two-year high.
In commodities, oil mostly sticks to solid overnight gains as a drop in US crude stocks boosts hopes that fuel demand will recover. [O/R]
Brent crude futures () were last 0.2% softer at $ 45.33 a barrel, while US crude futures () sank the same margin to $ 42.60 a barrel.
Weekly claims for unemployment in the United States are on the horizon at 1230 GMT and investors expect the modest decline to continue.