Investors express a cautious tone ahead of central banks’ meetings due later this week
Wall Street stocks finished sharply higher overnight, as investors digested signs of progress in developing a COVID-19 vaccine and a series of major corporate deals. AstraZeneca resumed its clinical trials of its vaccine while Pfizer Inc and BioNTech SE proposed to expand their Phase 3 pivotal COVID-19 vaccine trial to about 44,000 participants. In individual stocks, Nvidia Corp jumped nearly 6% following plans to buy UK-based chip designer Arm from Japan’s SoftBank Group Corp for as much as $40 billion. As a result, the Dow Jones Industrial Average rose 1.2%, the S&P 500 added 1.3%, and the Nasdaq Composite climbed 1.7%.
Today in Asia, equities were mixed-to-positive, buoyed by upbeat economic data out of China. While retail sales returned to growth in August for the first time in 2020, industrial production rose 5.6%, topping analysts’ estimates. The Shanghai Composite advanced 0.5% during the session. Australia’s S&P/ASX 200 ended slightly lower amid a further rise in AUD after the release of the minutes of the Reserve Bank of Australia monetary policy meeting. The central bank’s officials noted that the downturn had not been as severe as earlier expected and recovery was underway in most of Australia.
European stock markets turned mixed after a positive open as equities failed to capitalize on strong China data, with investors expressing a cautious tone ahead of central banks’ meetings due later this week. On the positive side, renewed hopes over a coronavirus vaccine help the markets to refrain from a more pronounced decline. The Stoxx Europe 600 index rose 0.2% on Tuesday.
Meanwhile, the dollar remains under pressure nearly across the board on Tuesday. USD demand has waned after the recent surge, with traders refraining from more decisive actions ahead of the outcome of the two-day Federal Reserve policy meeting. On the data front, German ZEW economic sentiment arrived at 77.4 in September versus 69.8 expected while ZEW current situation arrived at -66.2 versus -72.0 expected. However, the euro barely reacted to the release and continued to trade below 1.19 following the report. If the selling pressure surrounding the greenback intensifies any time soon, the pair could regain this significant hurdle.