US stocks moved higher in overnight trading as the reported rate of viral infection slowed to 9.6%, from around 11%. The US moves came despite falls on European bourses as the UK and Belgium reported the highest level of daily fatalities yet. Crude oil prices rose on reports that the OPEC meeting today will discuss production cuts of 10 million barrels per day.
It appears US investors are anticipating a further reduction in infections, as global infections and fatalities hit new highs and the mayor of New York pointed out that the curve was flattening rather than declining. New York also reported its worst day for deaths yet. Bond markets also diverged geographically. Longer dated European bonds rallied while US ten years sold off.
Oil prices are continuing their climb in early Asia Pacific trading after West Texas Intermediate futures rose more than 7% in Chicago. A meeting in Algeria later today brings together OPEC and Russia to discuss a new production agreement. Optimism is high even though a cut of 10 million barrels a day may not offset the decline in demand caused by virus containment measures.
Regardless, the combination of positive sentiment around infection rates and stronger oil prices is lifting commodity currencies. The Canadian and New Zealand dollars are holding higher ground, and CMC’s AUD index broke through 900 overnight, after touching lows around 810 just three weeks ago.
Asia Pacific stocks are tipped to open around 1.5% higher across the region. Hard evidence of the impact of containment measures arrives over the next 24 hours as the UK, Germany and China report trade balances.