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- Markets recovering some poise after “Trump trade” wobble
- S&P 500 futures higher and helping European to open on the front foot
- Energy stocks underpinning bourses as oil prices gain ground.
- Dollar steadies following its slide to four-month lows, Treasury yields nudge up
- South African rand getting slammed (again)
Investors are rediscovering their risk appetite as the initial shock fades after president Donald Trump’s failure to overhaul US healthcare.
Fears Mr Trump’s broader tax reform agenda agenda could be hobbled pushed the S&P 500 on Monday to a six week low, forced the dollar index to its weakest in four months and encouraged traders to buy perceived havens, like Treasuries, gold and the Japanese yen.
The Dow Jones Industrial Average, the price-weighted measure of 30 US blue chips, which hit a record at the start of the month having jumped 15 per cent since Mr Trump’s election, fell for an eighth consecutive day, recording its longest losing streak since 2011.
But Wall Street stocks finished the previous session well off their lows, while the greenback trimmed its losses, as those investors who had been waiting for a pullback in equities took the opportunity to build long positions.
US index futures suggest the S&P 500, which at one stage on Monday fell to 2,322, some 3 per cent below the March 1 record high, will add 5 points to 2,346.6.
Wall Street’s recovery from its recent trough is helping underpin other bourses, with a rally for commodity prices lifting resources stocks.
The pan-European Stoxx 600 is up 0.4 per cent as the mining index gains 1.7 per cent.
The greenback is striving to recover after its recent battering, with the dollar index (DXY), which measures the buck against a basket of its peers, up 0.2 per cent to 99.33.
The DXY touched a 14-year high of 103.82 at the start of the year as the “Trump trade” raged, but at one point on Monday hit 98.86, its weakest since mid November.
The Japanese yen, which started the week by nearly breaching ¥110, its strongest level in four months amid a rush for supposed haven assets, is steady at ¥110.64.
The euro is 0.1 per cent softer at $1.0852 and the British pound is 3 pips lower at $1.2550 ahead of the UK on Wednesday invoking Article 50 to give formal notice of its intention to leave the EU.
Standout mover in forex is the South African rand, down 2.1 per cent to 13.0158 per dollar on reports that president Jacob Zuma is planning to fire finance minister Pravin Gordhan.