Stocks rise with US futures on price data: Markets wrap

(Bloomberg) — European shares rose, tracking gains in Asia, as investors awaited U.S. price data that could provide guidance on the Federal Reserve’s policy path.

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The Stoxx Europe 600 rose 0.3% at the open, led by financial services and banks. U.S. equity-index futures advanced after a flat day on Wall Street. Asian stocks rose, recouping losses from last week’s rout on gains in Japan.

The British pound gained after data showed UK unemployment unexpectedly fell in the second quarter, raising doubts about the pace of the Bank of England’s policy easing. US Treasuries and the dollar are stable.

After last week’s turmoil, markets will focus on the U.S. consumer price index on Wednesday to see if the Fed will have a freer or more restrained hand in securing a soft landing for the economy. A recent rally in crude oil prices puts the spotlight on late Tuesday producer-price numbers as an indicator of pipeline inflation risks.

“The first wave of yen carry trade unwinds should now be complete, and investors’ focus is now on US inflation and retail sales data to gauge the probability of a soft landing,” said Linda Lam, head of equity advisory North Asia at UnionBank Privy. . “Perception of risk is adjusted.”

Japanese stocks gained after a holiday as the yen provided support to exporters. MSCI’s Asia-Pacific gauge rose as much as 1%. That erased losses from last week’s decline, a risk-off move that sent indices around the world falling and the VIX US volatility index at one point above 65, compared with a lifetime average of 19.5.

“The market’s reaction to last week’s VIX spike reflects a reassessment of positioning rather than US data points or yen disengagement,” said Billy Leung, investment strategist at Global X Management in Sydney. “However, given the signs of overseas outflows and tight liquidity, it is important to be cautious in reading short-term Asian movements.”

Brent crude was near $82 on Monday as the U.S. looked more closely at an Iranian attack against Israel. Fitch’s ratings on Israel’s sovereign debt were downgraded by one notch, keeping a negative outlook on debt as ongoing military conflicts weigh on the country’s public finances. Treasuries took profits on Monday.

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Elsewhere in Asia, regulators told commercial banks in China’s Jiangxi province not to settle their purchases of government bonds, taking some more drastic measures to cool a market rally that has alarmed Beijing.

The crackdown is starting to take its toll on corporate debt markets, as the average yield for one-year corporate yuan bonds with AA ratings — generally considered junk debt in the offshore market — saw its biggest jump since December 2022.

Highlights of this week:

• Germany ZEW Survey Expectations, Tuesday

• US PPI, Tuesday

• The Fed’s Raphael Bostick speaks on Tuesday

• Eurozone GDP, industrial production, Wednesday

• US CBI, Wednesday

• China House Prices, Retail Sales, Industrial Production, Thursday

• US Initial Jobless Claims, Retail Sales, Industrial Production, Thursday

• The central bank’s Alberto Musallem and Patrick Harker speak Thursday

• U.S. Housing Starts, University of Michigan Consumer Sentiment, Friday

• The central bank’s Austin Goolsbee speaks on Friday

Some key movements in the markets:

Shares

• The Stoxx Europe 600 was up 0.3% as of 8:18 a.m. London time.

• S&P 500 futures rose 0.5%

• Nasdaq 100 futures rose 0.8%

• Futures for the Dow Jones industrial average rose 0.3%

• The MSCI Asia Pacific index rose 1.1%

• The MSCI Emerging Markets Index was little changed

Coins

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0929

• The Japanese yen fell 0.5% to 147.90 per dollar

• The offshore yuan was little changed at 7.1760 per dollar

• The British pound was up 0.2% at $1.2800

Cryptocurrencies

• Bitcoin rose 1% to $59,433.28

• Ether fell 0.8% to $2,659.39

Bonds

• The yield on 10-year Treasuries rose a basis point to 3.91%

• Germany’s 10-year yield was little changed at 2.23%

• Britain’s 10-year yield rose one basis point to 3.93%

materials

• Brent crude was down 0.5% at $81.91 a barrel

• Spot gold was down 0.4% at $2,462.42 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Jason Scott.

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