Global Stocks Push Higher; Dollar Retreats: Markets Wrap

(Bloomberg) — Global stocks started the week with gains amid signs of positive developments in the fight against the coronavirus and a boost to stimulus measures from the Bank of Japan. The dollar retreated.

Asian shares climbed, U.S. futures reversed earlier losses to trade higher and European contracts pushed up. Trading volumes remained subdued amid the risk-on move. In currencies, the Australian dollar outperformed, while the yen strengthened. Treasury yields advanced. Coronavirus deaths slowed the most in more than a month in Spain, Italy and France while fatalities reported in the U.K. and New York were the lowest since the end of March.

The Federal Reserve joins the BOJ and the European Central Bank announcing policy decisions this week as the battle against the pandemic continues with some countries proceeding with steps to relax lockdown measures. Several major economies will release GDP numbers, while corporate earnings will keep flooding in, including from Amazon.com Inc., Barclays Plc and Samsung Electronics Co.

“This coming week will be huge from a macro data perspective and the extent to which the global economy has been floored by Covid-19,” said Simon Ballard, chief economist at First Abu Dhabi Bank. “Until we are clearly past the peak of the outbreak, on a global scale, and can feasibly deem the pathogen to be contained and there to be no meaningful risk of a second wave of infection, we believe a defensive investment strategy will remain the most appropriate.”

On Monday, the Bank of Japan removed limits on its purchases of government bonds, joining global counterparts in their unprecedented expansion of monetary stimulus as the coronavirus hammers the world economy. The central bank also ramped up its scope for buying corporate bonds and commercial paper.

Meantime, New York Governor Andrew Cuomo sketched out a phased-in reopening that begins with construction and manufacturing. That could start as soon as May 15, he said, probably upstate before the New York City area. Italy and Spain, Europe’s two hardest-hit countries, along with neighboring France, all signaled tentative moves to open up their economies.

Elsewhere, oil fell to trade around $15 a barrel as swelling global crude stockpiles made it more difficult for leading producers to balance the market by curbing output.

These are the main moves in markets:

Stocks

Futures on the S&P 500 rose 1.4% as of 7:14 a.m. in London. The gauge added 1.4% on Friday.Topix index advanced 1.8%.Australia’s S&P/ASX 200 Index gained 1.5%.South Korea’s Kospi index rose 1.8%.Hong Kong’s Hang Seng Index added 1.9%.Shanghai Composite rose 0.4%.Euro Stoxx 50 contracts rose 2.1%.

Currencies

The yen rose 0.3% to 107.19 per dollar.The offshore yuan traded at 7.0814 per dollar, up 0.1%.The euro bought $1.0852, up 0.3%.The Aussie gained 1.4% to 64.57 U.S. cents.

Bonds

The yield on 10-year Treasuries rose two basis points to 0.62%.

Commodities

West Texas Intermediate crude slipped 11.5% to $15.00 a barrel.Gold was at $1,722 an ounce, down 0.4%.

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