NEW YORK (Reuters) - The euro retreated from near two-month highs and equity markets wavered on Wednesday even as the European Union unveiled a 750 billion euro ($823 billion) recovery fund that helped offset concerns about unrest in Hong Kong over Beijing’s proposed security laws.
U.S. Treasury yields also retreated from gains on the European Commission’s proposed stimulus plan to bolster economies ravaged by the coronavirus pandemic boosted risk appetite and reduced demand for safe-haven bonds and gold.
The commission’s plan also includes 1.1 trillion euros for the EU’s next long-term budget that would contribute to the recovery fund that is aimed especially at Italy and Spain.
News of the plan earlier underpinned a broad market rally in Europe but much of Wall Street slipped as hopes of a pick-up in business activity hit the reality of an economy that is unlikely to see full recovery until late next year.
“Market participants may be assuming a little bit more positive news than is actually going to come down the pike,” said David Kelly, chief global strategist at JPMorgan Asset Management.
“We will see a start of a recovery, but it shouldn’t be misinterpreted,” Kelly said. “We’re not going to get back to full employment or even an unemployment rate below 10% any time this year and maybe it will take most of next year.”
MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.19%, while the pan-European STOXX 600 index lost 0.31%.
On Wall Street, the Dow Jones Industrial Average .DJI rose 178.04 points, or 0.71%, to 25,173.15 on rising
