FTSE 100 to start Thursday a sliver as traders balance vaccine hopes and US-vs-China fears

The FTSE 100 is set to start Thursday a sliver higher as trader find themselves caught between the latest escalation of tensions between the Trump administration and China, and hopes that a coronavirus (COVID-19) vaccine could be around the corner. In London, CFD firm IG Market sees the FTSE 100 up just 3 points making the price 6,208 to 6,211 with just over an hour to go until the open. Domestically, attentions are begrudgingly still on Brexit as Boris Johnson’s self-imposed July deal deadline looms with no agreements appearing particularly likely – though, like everywhere else, the vaccine story is taking focus. The US government yesterday stoked hopes as it ordered 100mln vaccine doses from Pfizer and partner BioNTech as a Phase 2/3 clinical trial is set to kick off in the coming days. Gentle optimism is evidently becoming the market’s default position amidst macro volatility. “It is becoming ever clearer that while concerns are rising over the global economic backdrop, as we head into the second half of the year, markets appear to be hedging their bets more and more when it comes to asset allocation,” said Michael Hewson, analyst at CMC Markets. “Equity investors, while remaining cautious about the outlook, still appear to be happy buying dips, as stock markets continue to trade in a manner that is two steps forward and one back, slowly ratcheting higher, with sharp drops in between. “On the other hand, traditional safe havens are also doing well with gold and silver prices surging while bond yields also slipped back with the UK 10-year gilt posting a record low of 0.12%, while US 10-year treasury yields closed at a three-month low.” Wall Street largely overlooked the escalating tensions with China – triggered after the US ordered the closure of China’s consulate in Houston, Texas, and the Chinese reportedly retaliated in kind, closing a US consulate in the city of Chengdu. Stocks advanced, albeit with a little less vigor than recent sessions. The Dow Jones climbed 165 points or 0.62% to finish Wednesday’s session at 27,005, whilst the S&P 500 added 0.57% to close at 3,276. The Nasdaq’s tech-led rally was comparatively muted as it edged up 0.24% to meander near its recent record highs, ending the day at 10,706. In Asia, it is a public holiday in Japan and equity trading is closed. Hong Kong’s Hang Seng moved up 82 points or 0.33% to 25,140 while the Shanghai Composite dipped 34 points or 1.03% to 3,298. Around the markets The pound: US$1.2741, up 0.05% Gold: US$1,869 per ounce, down 0.02% Silver: US$22.67 per ounce, down 1.38% Brent crude: US$44.41 per barrel, up 0.2% WTI crude: US$42.06 per barrel, up 0.33% Bitcoin: US$9,493, down 0.26%