2 Months : From Jul 2019 to Sep 2019
By Caitlin Ostroff
-- Asian, European stocks jump
-- S&P 500, Dow futures tick higher
-- U.S. Treasury yields rise
Global stocks climbed Monday on the prospect of central-bank stimulus measures across major economies.
The Stoxx Europe 600 rose 0.5% in morning trade, led by gains in its basic resources and banking sectors, with Deutsche Bank shares up 2.8%. The German DAX and the U.K.'s FTSE 100 were both up 0.6%.
European bank shares have gained on easing recession fears, having been "priced to a disaster scenario. They're in the bargain bin," said Patrick Spencer, vice chair of equities at U.S. investment firm Baird.
In the U.S., futures on both the S&P 500 and Dow Jones Industrial Average were up 0.7%.
Minutes from the Federal Reserve's most recent meeting, where it lowered interest rates for the first time since 2008, will be released on Wednesday, offering further clues on the central bank's policy outlook. Leaders from central banks around the world will meet on Friday in Wyoming for the Fed's annual policy symposium.
The British pound edged down against the euro, slipping 0.3%. The pound also slipped 0.2% against the U.S. dollar, which has experienced a prolonged rally against other currencies.
The pound's fall came on the heels of a leaked weekend report that predicted a no-deal Brexit would lead to shortages in medical supplies and food, reinforcing the negative impact of continued Brexit uncertainty.
The WSJ Dollar Index, which measures the currency against a basket of its peers, ticked up 0.1%.
Hong Kong stocks were among the best performers in Asia on Monday. The Hang Seng Index rose 2.1%, on pace for its best performance in two months, as there was some relief that the weekend's large-scale protest didn't end in violence.
Elsewhere in Asia, the Shanghai Composite rose 2.1%, while indexes in Japan and Korea rose less than 1% apiece.
Chinese shares stood out with a strong rally, buoyed by a fresh interest-rate reform by Beijing that is widely expected to result in easier monetary policy.
An official blueprint to develop the southern city of Shenzhen into a global technology hub and experiment with more financial liberalizations there made the gains on the smaller exchange even sharper.
Leading the pack were Shenzhen-listed technology firms and brokerages that stand to benefit from a proposed reform of share-listing policy. ZTE Corp.'s stock rose 6.1%, while Citic Securities increased 6.6%.
"Brokers are rising sharply because the Shenzhen development plan indicates stronger determination by the government to further open up the financial sector and encourage innovation," said Deng Wenyuan, a Suzhou-based analyst at Soochow Securities.
U.S. Treasury yields were up, after a brief inversion of 10-year and two-year yields last week stoked fears of a recession. The 10-year yield on Monday rose to 1.618%, from 1.540% on Friday. Yields rise when prices fall.
Eurozone government bond yields were also up from last week, with the U.K. 10-year gilt yield at 0.501% and the German 10-year bund at minus 0.641%.
Bond markets this week will be focused on speculation around a major stimulus packaged from the European Central Bank and German fiscal stimulus, said Commerzbank rates strategist Rainer Guntermann. Germany plans to sell a new 30-year bund on Wednesday.
In commodities, global benchmark Brent crude gained 0.8% to $59.09 a barrel. Gold dropped 0.5%.
Shen Hong and Steven Russolillo contributed to this article.
(END) Dow Jones Newswires
August 19, 2019 05:44 ET (09:44 GMT)
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