Euro Boosted as Huge EU Stimulus Plan Propels Global Stocks

Euro Boosted as Huge EU Stimulus Plan Propels Global Stocks 

Global stock markets mostly rose Tuesday along side the euro as EU leaders clinched an agreement on what they boasted was a historic rescue plan.

The 750 billion euro ($858 billion) deal was sealed after intense negotiations that saw threats of walkouts, vetoes and fierce opposition from Netherlands and Austria. "Deal!" tweeted EU Council Chief Charles Michel, whose job was to guide the talks over quite 90 hours.

The package sends tens of billions of euros to countries hardest hit by the virus, most notably heavily-indebted Spain and Italy, which had lobbied hard for a serious gesture from their EU partners. "This is that the most vital moment within the lifetime of our Europe since the creation of the euro" in 2002, French President Emmanuel Macron said.

The agreement boosted European bourses, including in Paris and Frankfurt, and also lifted the only currency to its highest level against the dollar since early 2019.

BK Asset Management's Kathy Lien said Europe has done far better than the us at reopening its economy without igniting a spike in coronavirus cases, which the package agreed in Brussels could increase that momentum. "With the US economic outlook growing more uncertain, these steps to make sure a stronger recovery (have) and will still drive (the) euro higher," Lien said.

Focus now turns to lawmakers in Washington who are looking to pass an enormous new stimulus package, with key supplemental unemployment benefits set to expire at the top of July.US stocks had a mixed session, with the Dow pushing higher behind gains in petroleum and banking shares, while the Nasdaq retreated from a record close.

Quincy Krosby, chief strategist at Prudential Financial, said the pullback in Nasdaq was probably thanks to profit taking.

Investors are hopeful that a number of the US states with bad coronavirus outbreaks could also be leveling off which lawmakers in Washington will approve another round of stimulus, Krosby said. "The package would help cushion the continued downside of the virus on the economy," she said.

Dow members Exxon Mobil and Chevron jumped 7.2 percent and 5.1 percent, respectively, as oil prices climbed to their highest level in four months after the ecu stimulus agreement was announced.

Another Dow member, Boeing, gained 2.4 percent because the Federal Aviation Administration said it might issue a proposed airworthiness directive for the 737 MAX, which has been grounded since March 2019 following two deadly crashes. The FAA statement moves the MAX a step further on the re-certification path after the agency on Dominion Day completed test flights on the plane.