Advances in vaccines drive up stocks, dollar still sick

LONDON / SHANGHAI (Reuters) – Shares and oil prices rose on Monday as the dollar fell as investors pinned hopes of an economic recovery on coronavirus vaccines, even as the world faced an increase the number of cases and delays towards a new American recovery.

The STOXX index of the 600 largest European stocks rose 0.5% to its highest level since February after AstraZeneca became the last major drugmaker to say its vaccine against the virus could be effective at around 90%.

Brent futures rose nearly 2% as traders saw demand for crude recover due to successful vaccine trials, while the euro edged up to 1.1864 as the dollar was testing the low end of a range he had been in for the past few months. [/FRX]

The vaccine developed by AstraZeneca and the University of Oxford is the third major trial to report success after American company Moderna Inc and Pfizer Inc with BioNTech SE in Germany, sending investors tired by the pandemic to take risks in the hope rapid economic recovery.

Their optimism also comes after a senior official in the U.S. government vaccine development effort said on Sunday that the first vaccines could be given to U.S. healthcare workers and others recommended by mid-December. .

Despite the acceleration of COVID-19 infections in the United States, the forecasts have helped raise hope that the lockdowns that have crippled the global economy may be coming to an end.

“The vaccine news today is positive, but it is only partially responsible for the rally in the stock markets this morning, which is also prompted by the announcement that the United States hopes to start the vaccination program in less than three weeks, ”said Philip Shaw, chief economist at Investec in London.

The rally showed investors were prepared to look beyond grim figures from US cases – cases topped 12 million this weekend – and weak European economic data released on Monday.

The IHS Markit Purchasing Managers’ Flash Composite Index, which tracks the manufacturing and service sectors that together account for more than two-thirds of the German economy, fell from 55.0 to 52.0.

The rally in European equities took the region’s November gains to 15% and followed another record for Asian stocks even before the latest vaccine news broke.

The largest MSCI index of Asia-Pacific stocks outside of Japan looked set to end the day 0.8% higher.

Australian stocks rose 0.3% as the country eased some restrictions on COVID-19. Most of the country has not seen any new infections or deaths in the community for several weeks.

Chinese bluechips finished 1% higher, Seoul’s KOPSI climbed 1.9% and Bangkok jumped 2.2% to a five-month high.

GOLD LOSES ITS BRILLIANCE

Analysts said the gains belied some uncertainty as monetary and fiscal assistance to the US economy remained elusive.

US Treasury Secretary Steven Mnuchin said last week that the Federal Reserve’s major pandemic loan programs would expire on December 31, putting the outgoing Trump administration at odds with the central bank and potentially increasing stress economy.

“The discussion is only just beginning and may take some time if recent partisan disagreements over the composition and size of budget spending are any indication,” ANZ analysts said in a note.

US e-mini futures for the S&P 500 rose 0.7% to 3,577 in Europe. Major Wall Street markets fell 0.4% to 0.8% on Friday due to the combination of doubts about aid and skyrocketing coronavirus infection rates in the country.

With news on vaccines and the dollar index, which tracks the dollar against a basket of six big rivals, at 92.264, commodity markets were still bullish, traders bullish on a recovery in demand. of crude pushing oil higher.

Brent futures were up 63 cents, or 1.4%, to $ 45.59 a barrel in London. West Texas Intermediate crude gained 49 cents, or 1.2%, to $ 42.91 a barrel. Both benchmarks jumped 5% last week.

Safe haven gold, meanwhile, has drifted to $ 1,872 an ounce, losing nearly 10% since its peak in August. [GOL/]

“The positive sentiment continues to be driven by the recent good news regarding the effectiveness of the developing coronavirus vaccines and the hope that the OPEC + meeting at the end of this month may see the group extend the current cuts of three to six months, “said Stephen Innes, chief global markets strategist at Axi, a financial services company.