(Bloomberg) — European stocks rose, following Asia higher, after the latest US data reinforced optimism in a global pivot toward central-bank easing next year as inflation fears evaporate.
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The Stoxx 600 index added 0.2%, climbing for a second day as US equity futures advanced. MSCI’s Asia Pacific Index gained the most in three weeks. US 10-year Treasuries were steady after a rally in the previous session took the yield below 4.2%. The dollar dipped against most of its Group-of-10 peers.
Tuesday’s weaker-than-forecast jobs-market data reinforced speculation the Federal Reserve will cut interest rates next year to avert a recession. That poured fuel on the gains for global bonds, but also triggered warnings that the market’s hopes for easing have gone too far.
“Additional signs of a cooling labor market solidify the notion that the Fed’s tightening trajectory has been relegated to the history books,” said Hebe Chen, an analyst at IG Markets Ltd. in Melbourne. “Now, all eyes are turning to next week’s FOMC meeting, making it a must-watch but done-deal event.”
The moves in Treasuries came after one of the European Central Bank’s most-hawkish officials said inflation is showing a “remarkable” slowdown. That led investors to bet that Europe will lead the world’s largest central banks on interest-rate cuts.
Bank of Japan’s Deputy Governor Ryozo Himino signaled that the central bank is inching closer to putting an end to the world’s last negative interest rate regime.
Oil steadied after a four-day drop as a flood of US exports, coupled with doubts over whether OPEC+ will be able to deliver on its planned production cuts, raised concerns of oversupply. Gold edged higher.
Key events this week:
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Eurozone retail sales, Wednesday
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Germany factory orders, Wednesday
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US ADP private payrolls, trade balance, Wednesday
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CEOs of the biggest banks on Wall Street, including JPMorgan, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America, expected to testify on regulatory oversight to the Senate banking committee, Wednesday
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Bank of Canada monetary policy meeting, Wednesday
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Bank of England issues biannual stability report on UK financial system, holds news conference, Wednesday
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China trade, forex reserves, Thursday
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Eurozone GDP, Thursday
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Germany industrial production, Thursday
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US wholesale inventories, initial jobless claims, Thursday
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Germany CPI, Friday
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Japan household spending, GDP, Friday
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Reserve Bank of Australia’s head of financial stability Andrea Brischetto speaks at Sydney Banking and Financial Stability conference, Friday
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US jobs report, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.2% as of 8:12 a.m. London time
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S&P 500 futures rose 0.2%
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Nasdaq 100 futures rose 0.4%
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Futures on the Dow Jones Industrial Average rose 0.1%
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The MSCI Asia Pacific Index rose 1.1%
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The MSCI Emerging Markets Index rose 0.3%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro fell 0.1% to $1.0784
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The Japanese yen was little changed at 147.08 per dollar
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The offshore yuan rose 0.1% to 7.1639 per dollar
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The British pound was little changed at $1.2601
Cryptocurrencies
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Bitcoin fell 0.2% to $43,792.08
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Ether fell 0.1% to $2,270.1
Bonds
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The yield on 10-year Treasuries advanced one basis point to 4.18%
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Germany’s 10-year yield was little changed at 2.24%
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Britain’s 10-year yield advanced two basis points to 4.04%
Commodities
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Brent crude rose 0.2% to $77.35 a barrel
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Spot gold rose 0.6% to $2,032.21 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rob Verdonck.
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