🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

GLOBAL MARKETS-Stocks rise to end bitter week, dollar jumps

Published 26/09/2020, 04:48 am
© Reuters.
EUR/USD
-
GBP/USD
-
UK100
-
XAU/USD
-
XAG/USD
-
US500
-
DJI
-
JP225
-
DX
-
GC
-
LCO
-
SI
-
CL
-
IXIC
-
STOXX
-
MIAPJ0000PUS
-
MIWD00000PUS
-

* Dollar index to post strongest week since April

* Oil heading for weekly drop on virus-linked demand concerns

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh (Updates prices; adds rouble)

By Rodrigo Campos

NEW YORK, Sept 25 (Reuters) - Stocks were set to fall more than 2% this week and the dollar was on track for its strongest week since April as concern over the economic effect of a second wave of virus-related lockdowns continued to weigh on investors' risk appetite.

But tech stocks led the way higher on Wall Street on Friday, as they have of late on days governed by worries over the economic recovery. The gains offset losses elsewhere, and an index of major stock markets globally was up on the day.

Other than COVID-19 angst, the week was dominated by speculation over the likelihood of another stimulus package to support the American economy.

"There's evidence of a slowdown in the United States, which we think is temporary, but it would be reinforced if there is no additional fiscal package," said Sebastien Galy, senior macro strategist at Nordea Asset Management.

Bets on more stimulus increased after squabbling U.S. political parties talked about another super-sized stimulus package but the rise in the dollar =USD and demand for safe-haven government bonds remained telling. GVD/EUR

On Wall Street, the Dow Jones Industrial Average .DJI rose 265.95 points, or 0.99%, to 27,081.39, the S&P 500 .SPX gained 41.35 points, or 1.27%, to 3,287.94 and the Nasdaq Composite .IXIC added 197.92 points, or 1.85%, to 10,870.19.

The S&P was on track for four consecutive weekly losses, the longest such streak in over a year.

The pan-European STOXX 600 index .STOXX lost 0.10% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.84%. The global index was down over 2% for the week.

Emerging market stocks lost 0.03%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.38% higher, while Japan's Nikkei .N225 rose 0.51% to end a three-day week.

Treasury yields remained little changed in a week where the 10-year traded in a 5-basis-point range.

"Overall the market remains fairly range-bound. There is some intraday, intra-week volatility that when you really look at it, we just don't go anywhere," said Justin Lederer, an interest rate strategist at Cantor Fitzgerald.

But the relapse in sentiment has hit emerging market debt, especially countries with weak credit ratings. Argentina's newly restructured bonds have lost around 25%, making it the worst return to markets since Greece in 2012, while plenty of other countries have seen 10% slides. EMRG/FRX

China's government bonds gained acceptance into one of the world's most coveted bond benchmarks, the FTSE Russell WGBI. CGBs will be introduced late next year. the currency markets, the dollar index climbed for the fourth time this week and was set for its strongest weekly showing since April.

The dollar index =USD rose 0.314% on Friday, with the euro EUR= down 0.38% to $1.1628.

The Japanese yen weakened 0.18% versus the greenback at 105.59 per dollar, while sterling GBP= was last trading at $1.2732, down 0.13% on the day.

Demand for the greenback was boosted in part by Washington's failure to create a stimulus package and concerns ahead of the U.S. election, according to Juan Perez, senior currency trader and strategist at Tempus Inc.

"In times like that the chaos and havoc and blurriness of the future is so intense and so dense, that's when the dollar is going to rise once again," said Perez.

The Russian rouble sank to a near six-month low against the dollar. Geopolitical concerns further weighed on Russian assets with the threat of sanctions over the poisoning of Kremlin critic Alexei Navalny, in which Moscow denies wrongdoing. The crisis in neighboring Belarus also continued to linger.

The rouble lost 1.10% versus the U.S. dollar at 78.17.

The dollar's strength this week has also battered commodities, with gold set for its biggest weekly drop in six. On Friday, spot gold XAU= dropped 0.2% to $1,864.96 an ounce. GOL/

Silver tumbled 14% this week so far, a drop not seen in over six months. The spot price XAG= fell 0.58% to $23.07 on the day.

Oil prices fell and were set for a weekly decline mostly due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections. O/R

U.S. crude CLc1 recently fell 0.02% to $40.30 per barrel and Brent LCOc1 was at $41.94, flat on the day.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets

http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Emerging markets

http://tmsnrt.rs/2ihRugV MSCI World over the years

https://tmsnrt.rs/2EwZNCR EM FX feels the pain

https://tmsnrt.rs/33ZOY4Y

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.