US equity futures rallied with European stocks while Asian shares slipped as investors weighed the prospects for success in American-Chinese trade talks.
Contracts on the Dow Jones, S&P 500 and Nasdaq indexes all jumped, shrugging off losses in the Asian benchmark after China was said to move toward cutting tariffs on US-made cars. Miners and carmakers advanced, helping the Stoxx Europe 600 Index extend gains as more than 90 per cent index members climbed. The Irish index of shares rose almost 1.8 per cent to 5505 in afternoon trading.
The pound rallied as Prime Minister Theresa May asked European leaders to sweeten a Brexit deal, trimming some of its losses from a day earlier. The dollar weakened while Treasuries and core European bonds fell.
“Markets are highly volatile,” said hedge-fund pioneer Paul Tudor Jones at a conference in New York. “I can easily see a situation in 2019 where all the deleveraging that we’ve experienced in the last month and a half - really, the last four or five months - all that deleveraging gets reinvested back into the market.”
The news on car tariffs followed reports that Chinese Vice Premier Liu He discussed a timetable for trade talks with Treasury Secretary Steven Mnuchin, which also helped to bolster sentiment. Yet investors also have an eye on the continuing flap over Canada's arrest of the chief financial officer of Huawei Technologies. And among a plethora of political risks, the UK is struggling to put its Brexit deal back on track and fears linger over the possibility a French protest movement could escalate further.
Elsewhere, India's assets saw a choppy session, with stocks initially roiled by a surprise resignation of the central bank governor on Monday, before posting a recovery as traders mulled the implications for Prime Minister Narendra Modi of regional election results. Emerging-market currencies and shares climbed along with oil and metals. – Bloomberg
