TOKYO (Reuters) – Equity markets rallied on Monday in hopes that President Donald Trump could be discharged from the hospital later in the day, easing some of the political uncertainty that rocked global stocks in the previous session.
Trump, 74, was taken to hospital on Friday for coronavirus treatment, but his doctors say he has responded well and could return to the White House on Monday.
This helped US e-mini S&P 500 futures climb 0.82% in Asian trading, while Nasdaq futures gained 1
MSCI’s broader index of Asia-Pacific equities outside of Japan rose 0.63%.
Australian stocks were up 2.37% for the largest daily gain in nearly two weeks. Japan’s Nikkei was up 1.39%. Chinese financial markets are closed for a public holiday.
“Equities and other risk traders should be well supported by easing Trump’s health concerns,” said Junichi Ishikawa, senior currency strategist at IG Securities in Tokyo.
“For the dollar, the impact is not that sharp. It is expected to fall against most currencies due to increased risk appetite, but the yen is also weak, and this is the only currency the dollar can rise against. “
The dollar rose against the yen but fell slightly against the Swiss franc as traders tried to gain a position ahead of what could be a volatile day in global markets.
Treasury yields rose slightly due to lower demand for the security of government debt.
Doctors treating Trump say they are satisfied with his progress. Relief for his health could fuel a rally in equities and other risky assets as investors prepare for the run-up to next month’s US presidential election.
Investors around the world were stunned late Thursday after Trump announced that he and the first lady had tested positive for the coronavirus.
Less than a month before the presidential election on November 3, Trump’s contraction of the coronavirus is another source of market volatility that makes it even more difficult to predict the outcome of the vote.
Democrat Joe Biden opened his widest lead in a month in the US presidential race, according to a Reuters / Ipsos poll released Sunday.
The White House initially sent mixed messages about Trump’s health, helping to fuel political uncertainty and focusing the investor’s attention on any news about his condition.
Some traders were particularly concerned about doctors’ admission that Trump had been given supplemental oxygen and steroids, which are normally used to treat severe cases of COVID-19.
The US dollar was up 0.22% to 105.60 yen, but fell 0.3% to 0.9185 Swiss francs as some investors adjusted positions in safe currencies.
The Aussie dollar was up 0.23% to $ 0.7181 after the Australian government, which issued a federal budget on Tuesday, announced additional wage subsidies to help the labor market.
Yields on benchmark 10-year Treasuries rose to 0.7104% and the yield curve steepened slightly, indicating that most investors felt comfortable taking more risks.
Gold, another asset often bought during times of uncertainty, was barely changed at $ 1,898.90
Brent crude oil futures rose 1.22% to $ 39.75 a barrel, while US crude futures gained 1.46% to $ 37.59 a barrel.
Reporting by Stanley White; Montage by Sam Holmes