By Stella QiuSYDNEY (Reuters) – U.S. and European stock futures saw significant gains on Thursday, driven by optimism surrounding the possibility of a peace agreement between Ukraine and Russia. This positive sentiment countered the rise in Treasury yields fueled by concerns about high inflation, which raised doubts about the likelihood of any further U.S. policy easing this year. Despite these economic uncertainties, fears of a global trade war persisted as U.S. President Donald Trump hinted at imposing reciprocal tariffs on countries imposing duties on U.S. imports. Gold prices remained close to their all-time highs amidst this economic backdrop.
The Japanese yen experienced notable losses due to the surge in U.S. yields, while the euro benefitted from reports of phone conversations between Trump and Russian President Vladimir Putin, as well as Ukrainian President Volodymyr Zelenskiy. These talks raised hopes of a potential resolution to the long-standing conflict between the two countries. Oil prices, however, saw a decline of over 2% overnight, and Wall Street closed the day with a mix of gains and losses.
Across Asia, EUROSTOXX 50 futures surged by 1%, with Nasdaq futures also rising by 0.4% and S&P 500 futures up by 0.2%. Japan’s Nikkei index climbed by 1.1%, while MSCI’s broadest index of Asia-Pacific shares outside Japan edged up by 0.3%. Despite the overall optimism in the market, some analysts remain cautious about the premature nature of the positive outlook, highlighting some potential challenges in the peace negotiation process.
In the foreign exchange market, the dollar remained at 154.52 yen after a 1.3% increase driven by rising U.S. yields. The euro also showed resilience, bouncing back from earlier losses to be 0.2% stronger for the day and 0.1% higher at $1.0392 on Thursday. In the commodities market, oil prices extended their decline amid hopes for a peace agreement between Russia and Ukraine, which could lead to the removal of sanctions affecting supply flows. U.S. crude dropped by 0.7% to $70.88 a barrel, following a 2.7% decrease overnight, while Brent was down by 0.7% at $74.66, after a 2.4% fall.
Gold prices remained steady at $2,902 per ounce, close to their record high of $2,942.7 reached on Tuesday. The economic landscape continues to evolve with various factors influencing market movements, from geopolitical developments to inflation concerns and monetary policy expectations. Investors are closely monitoring these dynamics as they navigate the ever-changing financial environment.
(Reporting by Stella Qiu; Editing by Jacqueline Wong)
