COVID Vaccine hopes give stocks, euro and oil new energy
World shares climbed toward a four-month high on Wednesday with the euro and oil in tow. This is due to the hopes for a COVID vaccine offset rising tensions between the United States and China.
Asia had a choppy session after more barbs between Beijing and Washington over Hong Kong, but 1.7%-2.2% gains for London, Frankfurt, Paris and a 1% rise in Wall Street futures blew away any caution.
An experimental vaccine for COVID-19 produced by US company Moderna drew. The company claims safe immune responses in all 45 healthy volunteers, an early-stage trial showed on Tuesday. There were reports on Wednesday that a separate University of Oxford trial was also looking good.
Hopes of progress this week towards a deal on the European Union’s 750 billion-euro COVID recovery fund were also helping Europe’s mood. The euro was above $1.1430 for the first time since March and Italy and Spain’s bond market borrowing costs came down again. The euro rose as high as $1.1445, its strongest since March 10 and not far off its peak so far this year of $1.1495. The single currency has been helped by hopes the EU will agree at its summit later this week on a financing package to limit the economic damage from the pandemic.
The yen climbed to 106.94 from 107.21 per dollar to leave it near a two-week high. Sweden’s crown vaulted to its highest versus the greenback since February 2019 and the risk-sensitive Australian dollar popped to a one-month high at $0.70.
Oil prices rose too after a drop in US crude inventories and before an OPEC video conference on production plans later in the day. Brent crude futures were up 24 cents at $43.14 a barrel. US crude futures rose 22 cents to $40.50 a barrel.
