Stock futures wobbled and commodities fell on Wednesday after U.S. President Donald Trump threw a last-minute spanner into pandemic relief plans, although Asian equities rose as traders looked through fears about an infectious new coronavirus strain, Reuters writes.
In a video posted on Twitter, Trump said a stimulus bill, agreed after months of wrangling in Congress, was “a disgrace” and that he wanted to increase “ridiculously low” $600 checks for individuals to $2,000.
The possibility of a delay to such long-awaited and hard-fought spending plans sent S&P 500 futures down as far as 1% below the index’s Tuesday close, though they recovered to sit about 0.3% below the close.
FTSE futures fell 0.2% and EuroSTOXX 50 futures fell 0.1%, while oil futures dropped 1.5% to re-test lows from Monday when coronavirus worries drove a sharp selloff.
Treasuries also caught a bid, with ten-year U.S. Treasury futures up two ticks in the Asia session and the yield on U.S. 10-year government bonds down one basis point.
“Personally we think the President will sign the bill at the last possible moment,” said Andrew Brenner, head of international fixed income at NatAlliance, in a note emailed after Trump’s message.
“But the true reality star will wait until the end,” he said. “Bond markets close 2 p.m. Thursday while stocks close at 1 p.m. – it may go down to the last moment.”
Some traders said Trump’s push for higher stimulus could lead to a spending increase.
The bill could be amended if congressional leadership wants to do so, and if they don’t, Trump’s choices are to sign the bill into law, veto it, or do nothing and let it become law.
The stimulus funds are needed as the U.S. recovery stalls and hospitals struggle to cope with a nationwide spike in infections at the same time as an even more contagious variant of the coronavirus spreads quickly in England.
The U.S. dollar clung to Tuesday’s gains in thin trade, though signs that a small virus outbreak in Sydney could be contained gave the Australian dollar a small boost.
Asia’s stock markets posted broad, if patchy, gains as investors focused on domestic economic strengths.
MSCI’s broadest index of Asia-Pacific shares outside Japan snapped three days of declines with a 0.6% rise, led by jump in electric vehicle stocks in South Korea and China after LG Electronics announced a production deal.
Be the first to comment