Reuters | Oct 21, 2020 06:30
By Stanley White and Jessica DiNapoli
TOKYO/NEW YORK (Reuters) - Asian shares and U.S. stock futures rose on Wednesday as renewed hopes for a new round of U.S. stimulus drew money into equities from government debt.
U.S. stock futures
The White House and Democrats in the U.S. Congress moved closer to agreement on a new coronavirus relief package on Tuesday as President Donald Trump said he was willing to accept a large aid bill despite opposition from his own Republican Party.
Negotiations will continue on Wednesday, an aide to top U.S. Democrat Nancy Pelosi said.
Benchmark U.S. Treasury yields hit a four-month high and the yield curve steepened on expectations for more U.S. fiscal spending, but some investors remain cautious about the chances of a deal before the U.S. presidential election on Nov. 3.
"More stimulus means stocks rise and yields rise," said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
"Without stimulus, everything goes into reverse. U.S. President Donald Trump is attacking Biden before the election, which could impact stimulus negotiations. However, it is also damaging for the Democrats if they continue to hold out."
On Wall Street, shares of Google parent company Alphabet (O:GOOGL) rose despite an antitrust lawsuit against it by the U.S. Justice Department.
Netflix (NASDAQ:NFLX), however, reported disappointing earnings, leading its shares to fall 6% after trading hours.
The onshore yuan
The U.S. dollar hit a one-month low against a basket of major currencies (=USD) as investors awaited the outcome of the fiscal stimulus talks and as coronavirus cases spiked in Europe.
Benchmark 10-year U.S. Treasury yields hit a four-month high of 0.8330% and the yield curve
Oil prices fell on Wednesday after a surprise climb in U.S. crude stockpiles added to concerns about a global supply glut.
Written By: Reuters
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