Asia-Pacific markets rise as investors monitor coronavirus developments; gold prices plunge

U.S. markets swung between gains and losses overnight. Hopes of a new coronavirus relief package and optimism over Russia’s claim of developing a vaccine boosted stocks for much of the trading day. That’s despite international skepticism about whether Russia’s vaccine was effective and safe, with doubts cast on the approach on testing.

However, all three indexes, the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite ended the day lower after virus aid talks between the White House and lawmakers stalled. Treasury Secretary Steven Mnuchin said Monday the White House is open to resuming coronavirus aid talks with Democrats and putting more relief money on the table to reach a compromise. However, Senate Majority Leader Mitch McConnell said Tuesday negotiations with Democrats were at a stalemate.

National Australia Bank’s Rodrigo Catril pegged the stalemate as the “catalyst for the big reversal in US equities in the last couple of hours of trading.”

“Now with no talks scheduled, the deadlock between Republicans and Democrats is at risk of dragging on for weeks,” Catril, a foreign exchange strategist at the bank, wrote in a morning note.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.660, swinging higher from levels above 93 seen earlier this week.

The Japanese yen traded at 106.57 per dollar, weakening from levels above 105 in the last few days. The Australian dollar changed hands at 0.7148, rising slightly.

Oil prices rose in the morning during Asian trading hours. International benchmark Brent crude futures edged up 0.27% to $44.62 per barrel. U.S. crude futures rose 0.26% to $41.74 per barrel.

What’s on tap for Wednesday (all times in HK/SIN):

  • 8:30 a.m.: Australia’s Westpac consumer sentiment for August
  • 10:00 a.m.: New Zealand’s interest rate decision
  • Earnings: Hong Kong’s Cathay, Tencent. Taiwan’s Foxconn

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