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Stocks Climb Globally on Trade Truce; Oil Jumps: Markets Wrap July 01, 2019
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Stocks advanced globally after the U.S. and China reached a truce in the trade war and agreed to resume talks toward a deal. Treasuries, gold and the yen dropped, but a series of weak factory reports from major economies took the edge off the bond retreat.

Futures on on all three main U.S. equity gauges rose 1% or more. Contracts for the Nasdaq Composite Index set the pace on news that President Donald Trump agreed to ease restrictions on Chinese tech giant Huawei as part of his accord with China’s Xi Jinping.

Technology stocks led the Stoxx Europe 600 Index, with energy shares also among the big gainers as crude surged to a five-week high after the trade truce and thanks to a deal between major producers to extend output cuts. Shares in Shanghai and Japan led Asia gains, with markets in Hong Kong closed for a holiday amid further protests in the city.

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European stocks have historically posted their biggest returns in July

Traders are relieved in the wake of the G-20 gatherings after the agreement to resume talks lent some hope that a damaging global trade war can still be resolved. In a reminder of the high stakes, a series of major purchasing manager readings on Monday morning showed declines, while Japan said it plans to slap export restrictions on some tech items to South Korea. U.S. factory data are also due today.

“With China-U.S. trade tensions temporarily out of the way, focus will probably head back towards U.S. data,” wrote strategists at DBS Group Holdings Ltd., characterizing Monday’s reaction in currency markets as “more relief than rally.” Friday’s American payrolls report will be “important to determine if May’s weakness was just a one-off,” they wrote.

Elsewhere, the lira rallied after Trump indicated he may reassess his threatsto sanction Turkey if it goes ahead with a Russian missile purchase. Swiss stocks rose as much as 1.3% as never-before-tested provisions to safeguard liquidity kicked in following a showdown with the European Union.

Here are some key events coming up:

  • Boris Johnson and Jeremy Hunt continue their campaign to be the next U.K. prime minister.
  • OPEC+, a wider coalition that includes Russia, is meeting in Vienna.
  • The U.S. celebrates the Independence Day holiday on Thursday.
  • The U.S. jobs report is due Friday and is projected to show nonfarm payrolls rose by 160,000 in June, rebounding from 75,000 the month prior.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index surged 1.1% as of 9:26 a.m. London time to the highest on record with the largest jump in almost four weeks.
  • The Stoxx Europe 600 Index gained 0.8% to the highest in almost two months on the biggest rise in almost two weeks.
  • The U.K.’s FTSE 100 Index gained 0.9% to the highest in almost 10 weeks on the largest rise in almost two weeks.
  • The MSCI Asia Pacific Index increased 0.8% to the highest in almost two months.

Currencies

  • The Bloomberg Dollar Spot Index climbed 0.2% to the highest in more than a week on the largest increase in more than two weeks.
  • The euro dipped 0.4% to the weakest in more than a week on the biggest dip in more than two weeks.
  • The British pound dipped 0.3% to $1.2656, the weakest in more than a week.
  • The Japanese yen fell 0.4% to 108.28 per dollar, the weakest in almost two weeks.

Bonds

  • The yield on 10-year Treasuries gained two basis points to 2.03%.
  • Germany’s 10-year yield climbed less than one basis point to -0.32%.
  • Britain’s 10-year yield dipped less than one basis point to 0.829%.

Commodities

  • Gold sank 1.5% to $1,387.77 an ounce, the weakest in more than a week on the biggest tumble in more than 10 months.
  • West Texas Intermediate crude rose 2.8% to $60.10 a barrel, the highest in almost six weeks on the largest advance in more than a week.

By BLOOMBERG