A positive assessment of the economic bounce back in the US from the Chair of the Federal Reserve lifted sentiment overnight. Although Mr Powell also warned of “the need to keep the virus in check”, the market response suggests a focus on the positive. Stocks rallied, oil and copper rose, and bond yields edged lower as investors put money to work.

The gains defied worsening infection and hospitalisation rates in southern US states, and the consequent re-institution of containment measures. The share market gains were narrowly based, with the US 30 index roughly doubling the gains of broader market measures. A 14.4% jump in Boeing’s price drove the world’s most venerable index, after regulators allowed the aircraft manufacturer to starting test a fix for it’s 737 MAX planes.

Currency markets provided the most measured response. The safe haven yen fell, and traders supported the Norwegian Kroner and Canadian dollar. Crypto currencies again went their own way, edging lower as the US dollar rose.

The US secretary of State announced the withdrawal of Hong Kong’s preferential treatment, citing recently introduced security measures and risks to US intellectual property. The announcement came after market, and traders will watch Beijing closely over the coming sessions for any response. US futures markets are adding to the overnight gains this morning, despite the apparent deterioration in Sino-US relations.

Japanese industrial production data released this morning may take the gloss off the overnight moves. It fell 8.4% in May, disappointing estimates of a 5.9% fall. China PMIs, due later this morning, are the main event in the Asia Pacific region today. Both manufacturing and services are expected to expand in June, with forecast readings of 50.5 and 53.6 respectively.