In this article
Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.
Stocks advanced in Europe and Asia while U.S. index futures drifted after more signs emerged that China will move to lessen the trade war’s repercussions. European sovereign bonds nudged lower and Treasuries steadied.
The Stoxx Europe 600 Index climbed, driven in part by the strong rotation into cyclical sectors that had lagged behind this year, such as mining and banking shares. Contracts on the three main U.S. equity indexes all fluctuated. Yields on 10-year Treasuries and similar German bunds both touched one-month highs on Wednesday.
Equities jumped in Japan and Hong Kong after an influential newspaper editor said China will implement measures to ease the trade war’s impact on the world’s second-biggest economy. The measures planned by Beijing will benefit some companies from China and the U.S., Global Times editor Hu Xijin said in a Twitter post. Japan’s currency dropped for a third straight session.
Stocks are rebounding in September on hopes for fresh monetary stimulus from the European Central Bank on Thursday and the Federal Reserve next week, while market-supportive measures by China helped lift sentiment. Strong monetary easing is not a given, though, with some investors dialing back their expectations of accommodation and bond traders pulling back from the more bullish sentiment of August.
“We are primed for a little bit of disappointment,” Jeff Boswell, a fund manager at Investec Asset Management, told Bloomberg TV in Singapore. “On the QE front, whilst we’ve been expectant of something — certainly on the corporate bond-buying side that the market’s been expecting — it is unlikely to come tomorrow.”
Elsewhere, oil futures climbed alongside gold. South Korean infrastructure shares outperformed after the departure of President Donald Trump’s national security adviser, spurring speculation the U.S. may show conciliatory gestures toward China and North Korea.
Here are some key events coming up this week:
- OPEC’s monthly oil market report, which includes demand forecasts and production estimates, is due Wednesday.
- The ECB policy meeting Thursday is widely expected to see a cut to interest rates and a review of all options, including QE. Policy makers will also publish forecasts for growth and inflation. ECB President Mario Draghi will hold a press conference.
- U.S. data for August is due on producer prices Wednesday, and CPI Thursday.
These are the main moves in markets:
- The Stoxx Europe 600 Index climbed 0.5% as of 10:27 a.m. London time.
- Futures on the S&P 500 Index were little changed.
- Japan’s Topix index gained 1.6%.
- The MSCI Asia Pacific Index increased 0.9%.
- The Bloomberg Dollar Spot Index increased 0.1%.
- The British pound climbed 0.1% to $1.236.
- The euro dipped 0.2% to $1.1026.
- The Japanese yen weakened 0.2% to 107.72 per dollar.
- The yield on 10-year Treasuries dipped one basis point to 1.72%.
- The yield on two-year Treasuries fell less than one basis point to 1.67%.
- Germany’s 10-year yield climbed one basis point to -0.54%.
- Australia’s 10-year yield gained six basis points to 1.144%.
- West Texas Intermediate crude increased 1.5% to $58.25 a barrel.
- Gold rose 0.5% to $1,493.91 an ounce.
- Iron ore gained 2.2% to $90.80 per metric ton.
- LME zinc climbed 1.2% to $2,365.50 per metric ton.
— With assistance by Adam Haigh
Source: Read Full Article