(Bloomberg) — European equities gained after a euro-area policy maker hinted that two more interest rate cuts may be in store this year.
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The Stoxx Europe 600 index advanced about 0.5%, led by the tech sector after a rebound in Nvidia Corp. shares helped boost the S&P 500 on Tuesday. Basic resources outperformed as crude oil and iron ore prices rose.
Among individual movers in Europe, Deutsche Post AG added more than 3% after US peer FedEx Corp.’s jumbo profit forecast. Danske Bank A/S rose more than 2% after lifting its full-year outlook.
In the absence of major data from the euro zone on Wednesday, traders are taking their cues from policy signals. Investor expectations for the European Central Bank to loosen monetary policy twice more this year are fair, according to Governing Council member Olli Rehn, who added that officials shouldn’t overly dampen economic activity.
US equity futures rose, suggesting Wall Street’s tech-driven rally — fueled Tuesday by Nvidia’s 7% jump — still has momentum. The giant chip maker was up almost 3% in US premarket trading, extending a rebound from Monday’s $430 billion rout.
“Nvidia’s volatility has weighed on market sentiment, but we think the structural investment case for artificial intelligence remains intact,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We also hold a constructive outlook for broader equities amid solid fundamentals.”
The 10-year Treasury yield ticked higher and a gauge of the dollar was steady. The US will sell $70 billion of five-year notes later Wednesday after a solid auction of two-year Treasuries yesterday.
In Asia, Japanese and Hong Kong equity gauges rose, while those in Australia declined. Australia’s dollar and bond yields climbed after the inflation numbers suggested price pressures remain stubbornly strong and bolstered the case for the central bank to resume raising interest rates.
The yen held just below the psychologically important level of 160 per dollar, a breach of which will likely boost intervention concern.
China’s 10-year bond yield fell to a more than two-decade low as investors flocked to fixed-income securities amid concern about the slowing economy and expectations for further stimulus.
In commodities, oil rose ahead of a US government report on crude inventories and fuel demand following the release of mixed industry data. Iron ore climbed for a second day. Copper fell to the lowest in more than two months with prices facing sustained pressure from unusually weak Chinese demand. Gold was little changed.
Key events this week:
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US new home sales, Wednesday
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China industrial profits, Thursday
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Eurozone economic confidence, consumer confidence, Thursday
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US durable goods, initial jobless claims, GDP, Thursday
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Nike releases earnings, Thursday
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Japan Tokyo CPI, unemployment, industrial production, Friday
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US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday
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Fed’s Thomas Barkin speaks, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.5% as of 9:36 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 were little changed
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The MSCI Asia Pacific Index rose 0.3%
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The MSCI Emerging Markets Index rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro fell 0.2% to $1.0695
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The Japanese yen fell 0.1% to 159.93 per dollar
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The offshore yuan was little changed at 7.2965 per dollar
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The British pound fell 0.2% to $1.2666
Cryptocurrencies
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Bitcoin fell 0.7% to $61,455.41
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Ether fell 0.7% to $3,384.89
Bonds
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The yield on 10-year Treasuries advanced two basis points to 4.27%
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Germany’s 10-year yield advanced one basis point to 2.43%
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Britain’s 10-year yield advanced two basis points to 4.10%
Commodities
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Brent crude rose 0.1% to $85.10 a barrel
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Spot gold fell 0.2% to $2,315.91 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Carly Wanna, Winnie Hsu and Michael Msika.
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