(Bloomberg) — Gold smashed its all-time high while the dollar extended a slump as investors anticipated a dovish Federal Reserve decision this week and weighed a global resurgence of coronavirus outbreaks. U.S. stock futures advanced.
The yellow metal notched its biggest intraday increase since April and pushed toward $2,000 an ounce, with silver also surging. A gauge of the dollar sank to February 2019 closing levels. Treasuries edged higher, and Bitcoin climbed back above $10,000.
Nasdaq 100 futures rose more than 1% as tech companies climbed in pre-market trading along with gold miners. The Stoxx Europe 600 Index struggled for traction as airlines were clobbered after the U.K. ordered quarantines for passengers returning from Spain.
Investor concern about the global economy and expectations that the Fed’s open market committee meeting will reinforce a dovish outlook are driving the dollar and precious metals in opposite directions and supporting equities. While fresh outbreaks of the virus emerged from China to Spain, cases fell in the populous states of California, Florida and New York.
“The July FOMC meeting should kick off a period from August into mid-September in which markets should price in an increasingly dovish, forward-looking Fed policy via lower real rates,” Morgan Stanley strategists including Matthew Hornbach wrote in a report. “This should benefit breakeven inflation rates, support risk assets, and weigh on the U.S. dollar.”
Meanwhile, Senate Majority Leader Mitch McConnell is expected to release a $1 trillion pandemic relief proposal on Monday, which will kick off talks with Democrats on further relief measures.
Here are some key events coming up:
Earnings include Apple, Amazon.com, Alphabet, Chevron, Rio Tinto, L’Oreal, Caterpillar, Samsung, Barclays and Credit Suisse.The Federal Open Market Committee holds its policy meeting on Tuesday, with an announcement due on Wednesday.U.S. second-quarter GDP is expected on Thursday.China PMI data comes Friday.
These are the main moves in markets:
Futures on the S&P 500 Index rose 0.5% as of 6:50 a.m. New York time.Nasdaq 100 Index futures gained 1.1%.The Stoxx Europe 600 Index fell 0.1%.The MSCI Asia Pacific Index increased 0.7%.
The Bloomberg Dollar Spot Index sank 0.8%.The euro climbed 0.6% to $1.173.The British pound gained 0.6% to $1.2872.The Japanese yen strengthened 0.8% to 105.25 per dollar.Bitcoin surged 6.6% to $10,268.
The yield on 10-year Treasuries fell two basis points to 0.57%.Britain’s 10-year yield decreased two basis points to 0.12%.France’s 10-year yield decreased three basis points to -0.173%.Australia’s 10-year yield climbed two basis points to 0.892%.
West Texas Intermediate crude rose 0.5% to $41.48 a barrel.Silver strengthened 6.5% to $24.24 per ounce.Gold strengthened 2.1% to $1,942.23 an ounce.
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