US and European equity futures rose with Asian stocks Tuesday despite escalating geopolitical risks, with Japan leading gains as the world’s third-largest economy reopened. Treasuries dipped in early European trading after the three-day US weekend, while the Dollar retreated. Futures on the S&P 500 were up on Friday’s close, suggesting a positive open on Wall Street. Shares rose more than 2.00% in Tokyo, Sydney and Hong Kong, which showed signs of stabilising after weekend unrest. Seoul and Shanghai saw more modest gains. Crude oil advanced past $34 a barrel in New York.
Tensions between Washington and Beijing remain in focus with China condemning the US for adding 33 Chinese entities to a trade blacklist, but without announcing any retaliatory steps. Meanwhile, China sought to reassure Hong Kong that its judiciary would remain independent under a new national security law. Cutting against the tensions are mounting signs that Coronavirus infection rates are moderating. The Japanese government ended its nationwide state of emergency Monday, while a rise in a gauge of German business expectations provided another glimmer of hope for equity bulls.
Here are some key events coming up:
· Earnings continue with companies including Nissan Motor, British Land, Royal Bank of Canada and HP Inc.
· Singapore’s parliament on Tuesday is expected to announce another stimulus package
· Thursday brings the US jobless claims reading for the week ended May 23
· Federal Reserve Chairman Jerome Powell participates in a virtual discussion on Friday
These are the main moves in markets:
· Japan’s Topix Index rose 2.20% at the 3 pm close in Tokyo
· Futures on the S&P 500 were up 1.90% from Friday
· Australia’s S&P/ASX 200 Index gained 2.50%
· Kospi Index rose 1.60%
· Hong Kong’s Hang Seng Index rose 2.10%
· Shanghai Composite Index rose 0.80%
· Euro Stoxx 50 futures rose 1.20%
· The Bloomberg Dollar Spot Index fell 0.30%
· The Yen dipped 0.10% to 107.84 per Dollar
· The offshore Yuan was little changed at 7.1407 per Dollar
· The Euro rose 0.30% to $1.0928
· US 10-year Treasury yields rose two basis points to 0.68%
· Australia’s 10-year bond yields rose two basis points to 0.88%
· West Texas Intermediate crude added 3.70% to $34.50 a barrel
· Gold was little changed at $1,733.26 an ounce
Source: Sanlam Private Wealth