European Stocks Rise As Chinese Mood Support Lifts: Markets Wrap

(Bloomberg) – European stocks started the week on a positive note, tracking Friday’s gains on Wall Street and a rally in Asia after China announced support for its stock market.

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The Stoxx Europe 600 index was up 0.6% at the open. Technology stocks led the advance as traders assessed comments from Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde at Jackson Hole on Friday that did not change the outlook for interest rates. Volumes in Europe could be thin throughout the day with UK markets closed for the bank holiday. US stock futures rose, while Treasury yields fell and the dollar held steady.

US stocks rose and Treasury yields jumped on Friday after Powell stuck to the letter in his Jackson Hole speech, saying the Fed was “willing to raise interest rates further if appropriate”, even as he asserted that the central bank would “move cautiously”. Guided by economic data. Similarly, Lagarde said the ECB would set borrowing costs as high as needed to keep inflation in check.

“Not much was said that changed our outlook for US stocks,” after Powell’s comments, Lauri Calvacina, strategist at RBC Capital Markets, wrote in a note. “Stock investors have been rallying around the idea that interest rates could be higher for a while, that it’s possible that the Fed’s job may not be done yet, that they’re data dependent. That message sounded reinforced on Friday, but we don’t see it contradicting what we’ve heard from Many stock investors recently.

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Asian indices rose, although Chinese stocks pared most of their early gains on Monday, showing once again that Beijing’s efforts to boost its markets are faltering in the face of economic concerns. After opening 5.5% higher, the CSI 300 index of mainland stocks was up nearly 1.4% at 2:46 PM in Shanghai. Foreign funds accelerated selling during the day, in preparation for this month’s outflows to their largest ever volume.

Elsewhere, there was little change in both oil and gold.

Main events this week:

• US Conference Board Consumer Confidence Index, Tuesday

• Eurozone Economic Confidence, Consumer Confidence, Wed

• US GDP, Wholesale Inventories, Pending Home Sales, Wednesday

• China Manufacturing PMI, Non-Manufacturing PMI, Thursday

• Japanese Industrial Production, Retail Sales, Thursday

• Eurozone CPI, Unemployment, Thursday

• The European Central Bank publishes the calculation of its July monetary policy meeting, Thursday

• US personal spending and income, initial jobless claims, Thursday

• China’s Caixin Manufacturing PMI, Friday

• Eurozone, S&P Eurozone Global Manufacturing PMI, Friday

• South African Central Bank Governor Lesitia Kganyago and Federal Reserve Bank of Atlanta President Rafael Bostick, Hugh Bell of the Bank of England and Gita Gopinath of the International Monetary Fund on panel at the Reserve Bank of South Africa conference, Friday

• Boston Federal Reserve Bank President Susan Collins speaks at a virtual event on Friday

• US Unemployment, Nonfarm Payrolls, Light Vehicle Sales, ISM Manufacturing, Construction Spending, Friday

Some of the major moves in the markets:

Stores

• The Stoxx Europe 600 Index is up 0.6% as of 8:13 am London time.

• S&P 500 futures rose 0.1%.

• Nasdaq 100 futures were little changed

• Dow Jones Industrial Average futures rose 0.3%.

• The MSCI Asian Index rose 1.1%.

• The MSCI Emerging Markets Index rose 0.7%.

currencies

• The Bloomberg Spot Dollar Index has changed little

• The euro rose 0.2 percent to $1.0817

• There was little change in the Japanese yen at 146.40 per dollar

• There was little change in the yuan in foreign transactions at 7.2964 per dollar

• The British pound rose 0.1% to $1.2593

Digital currencies

• Bitcoin fell 0.6% to $25,924.85

• Ethereum fell 0.7% to $1,641.66

bonds

• The yield on the 10-year Treasury fell 2 basis points, to 4.22%.

• The yield on 10-year German bunds was unchanged at 2.57%.

• The yield on British 10-year bonds rose 2 basis points to 4.44%.

goods

This story was produced with the help of Bloomberg Automation.

With assistance from Chester Young and Farah El Bahrawy.

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