(Redesigns, price updates)
* Investors bet the flight to safety is overkill
* European equities up 0.2%, US sees positive opening
* Treasury, Bund yields rise as calm reigns
* Global currencies against dollar tmsnrt.rs/2PmYOcE
LONDON, July 21 (Reuters) – Equities and oil rose as bond yields eased on Wednesday as risk appetite returned, despite fears over increasing cases of the Delta coronavirus variant around the world and the lingering concerns about inflation that had caused an earlier flight to security.
While a key European Central Bank meeting on Thursday is expected to adopt a conciliatory tone and provide further impetus, the STOXX benchmark of the region’s 600 largest stocks rose 0.2% and US stocks looked positive with S&P 500 futures up 0.49%.
Shares could benefit from a further increase later Wednesday if US President Joe Biden’s bipartisan $ 1.2 trillion infrastructure bill can navigate a scheduled procedural vote despite Republican calls for a delay.
After falling to a five-month low of -0.44% on Tuesday, the German 10-year Bund yield traded 2 basis points to -0.40% on Wednesday as markets calm down Europeans.
“The measures had gone too far,” said Jan von Gerich, chief analyst at Nordea.
“The markets tend to do this, but it’s dangerous to say it’s over for now until we see more stabilization.”
The dollar index turned negative that day at 2:00 p.m. GMT at 92.916 after hitting 93.194, its highest since April, early in the session as the US currency beat gold as a safe haven asset of choice. .
Meanwhile, the British pound ignored Britain’s demand for a new European Union deal to govern post-Brexit trade with Northern Ireland, climbing 0.38% to 1.3678 $.
A slew of bullish updates from blue-chip European companies bolstered the positive mood in equity markets, with travel and leisure stocks rallying 4% after being hammered recently by concerns over a resurgence in equity markets. coronavirus cases.
In addition to looking past these rising cases, investors appeared to allay fears that last week’s data showing a spike in US consumer prices in June could prompt the Federal Reserve to end more quickly to emergency stimulus measures.
This earlier flight to safe-haven securities had lowered US 10-year rates by < US10YT=RR> by more than 20 basis points in the space of a week, but they edged up slightly to 1.2817% on Wednesday.
Gold also lost some of its recent safe-haven luster on Wednesday, with spot prices falling 0.4% at 2:00 p.m. GMT as investors preferred the dollar.
The more positive mood in European stocks on Wednesday contrasted with a 0.02% drop in the MSCI’s largest Asia-Pacific equity index outside of Japan, with South Korea reporting a daily record for new infections.
Seoul’s KOSPI index slipped 0.52% and Hong Kong’s Hang Seng index fell 0.4%.
“While part of the world ignores the increase in infections as vaccination rates limit the severity of any symptoms of new cases, there are few parts of the world that can totally ignore it,” said Rob Carnell , Asia-Pacific Chief Economist at ING.
Oil prices rose more than 3% as improving risk appetite provided support despite data showing an unexpected increase in US crude inventories last week and weaker demand prospects in due to the increase in COVID-19 infections.
Brent crude futures had gained $ 2.13, or 3.1%, to $ 71.48 a barrel at 1403 GMT. US West Texas Intermediate crude futures rose $ 2.27, or 3.4%, to $ 69.47 a barrel.
Reporting by Lawrence White and Andrew Galbraith, additional reporting by Dhara Ranasinghe; Edited by Christopher Cushing, Kim Coghill, Catherine Evans, Timothy Heritage and Tomasz Janowski For the Reuters Live Markets blog on European and UK stock markets, please click on: