European shares bounces with nudge from financial and tech stocks

European Stock Markets

A bounce across financials and tech stocks helped European stocks nudge higher on Thursday, though carmakers’ shares came under pressure after the United States launched a probe into auto imports.

The pan-European STOXX 600 index was up 0.3 percent by 0857 GMT, after falling more than 1 percent from a 3 1/2-month peak in the previous session as worries over spending plans from Italy’s new coalition and global trade weighed on risky assets.

Concerns over a U.S.-China trade deal continued after U.S. President Donald Trump said that any deal would need “a different structure”.

German carmakers BMW (BMWG.DE), Daimler (DAIGn.DE) and Volkswagen (VOWG_p.DE) dropped 1.8 to 2.8 percent after the United States launched a national security investigation into car and truck imports that could lead to new U.S. tariffs.

Germany's benchmark DAX index .GDAXI inched 0.1 percent higher and Europe's autos sector .SXAP was the worst-performing, losing 1.4 percent.

But a bounce among financials and tech stocks helped European markets rise. Minutes from the U.S. Federal Reserve’s last meeting indicated that the central bank would maintain a gradual approach to rate hikes, something seen as supportive of risky assets.

Italy's FTSE MIB .FTMIB was up 0.9 percent after Italy's president invited political novice Giuseppe Conte to be prime minister.

Aryzta (ARYN.S) was a standout faller among individual stocks. Shares in the Swiss food company slumped 28 percent after the firm cut its full year earnings outlook once more.

Elsewhere shares in Deutsche Bank (DBKGn.DE) reversed slight gains from earlier on to trade 0.1 percent lower after the bank said it would cut thousands of staff in a revamp of its investment bank.

Deutsche Bank’s shares are down around 31 percent so far this year.

UK stocks were among the top gainers on the STOXX 600.

Industrial distribution firm Electrocomponents (ECM.L) jumped 9.7 percent after reporting double-digit growth in annual revenue and profit, while food ingredients firm Tate & Lyle (TATE.L) rose nearly 7 percent after posting higher annual profits.

Trade and growth fears spurs dash for safe havens

Global Stock Markets

Investors sold equities on Wednesday and raced to buy yen and government bonds from the United States and Germany on fears that setbacks to U.S-China trade talks would undermine increasingly fragile-looking world growth. 

The yen JPY=D3 rose 1 percent against the dollar, U.S. bond yields US10YT=RR fell to eight-day lows and world shares .MIWD00000PUS slipped half a percent from one-week highs as weak euro zone data added to negative sentiment after U.S. President Donald Trump's comments on the crucial trade talks.

Investors were also watching Turkey and Italy, with the former seemingly headed for a full-blown crisis as the currency plunged to new record lows. Italian borrowing costs resumed their rise back towards recent multi-month highs on fears an incoming coalition will sharply boost government spending.

The risk-off mood was initially triggered by Trump saying he was not pleased with progress on trade talks with China.

The comments tempered earlier optimism that China and the United States would be able to avert a damaging global trade war. U.S. Treasury Secretary Steven Mnuchin had said earlier the “trade war” was “on hold”.

Trump also floated plans to fine China’s ZTE Corp (000063.SZ) (0763.HK) and cast doubt on a planned June 12 summit with North Korean leader Kim Jong-Un.

Those developments drove Wall Street to a weaker close on Tuesday and filtered into Asia where MSCI's ex-Japan equity benchmark .MIAPJ0000PUS fell 0.3 percent. Japan's Nikkei .N225 lost 1.2 percent to reach 1-1/2-week lows.

The pan-European stock index meanwhile fell 0.8 percent while futures signalled a sharply weaker open for New York markets ESc1.

Such worries were underscored by flash Purchasing Managers’ Index (PMI) data which showed on Wednesday that the euro zone economy was slowing more sharply than previously expected.

The data, along with the global sentiment setbacks, sent euro zone bond yields broadly lower, while U.S. Treasury yields slipped to an eight-day low after retreating sharply on Tuesday from near seven-year highs.

“Italy’s political impasse continues, French and German PMIs were soft and global risk sentiment has taken another knock,” Societe Generale analysts said.

Savary was more sanguine on the data, noting that growth, while slowing, remained healthy. But he warned that trade setbacks alongside geopolitics, especially the reimposition of Iran sanctions, could have economic consequences via potentially higher inflation.

Oil prices held near 3-1/2-year highs on concerns over supply from Venezuela and Iran. But Brent LCOc1 futures slipped 0.5 percent, coming off the $80 per barrel milestone.

Lower U.S. yields sapped some of the appetite for the dollar, taking it almost 1 percent lower against the yen JPY=D3. Against a basket of currencies, however, it rose 0.3 percent, with the euro EUR=EBS hitting a new six-month low against the greenback.

The single currency also fell against another “safe” asset, the Swiss franc EURCHF=D3, touching a two-month low.

Italian bonds fell in value, reversing the modest gains seen on Tuesday after six days of selling that took 10-year yields IT10YT=RR to their highest in 14 months.

Italian stocks tumbled 1.8 percent .FTMIB and are so far suffering their worst month since mid-2016. Investors are watching to see if the eurosceptic Paolo Savona would be appointed to the key economy minister position.

Turkish bond yields have jumped almost to 15 percent, more than 250 bps higher since end-April, with an emergency interest rate rise looking all but certain.

European shares rises with easing trade worries

European Stock Markets

European shares rose on Monday as easing trade war worries lifted the dollar, supporting exporters, while selling pressure on Italian stocks calmed down after a painful week, as markets awaited developments in the creation of a new government. 

The pan-European STOXX 600 index rose 0.4 percent by 0914 GMT, hovering near its highest level in over 3 months, while the FTSE 100 .FTSE hit a new record high, as strength in the dollar supported the internationally exposed index.

The dollar hit a fresh five-month high on relief that U.S. Treasury Secretary Steven Mnuchin declared the U.S.-China trade war “on hold” following their agreement to suspend the tariff threats.

While activity was reduced by the closure of some markets, including Germany, for Whit Monday, bargain hunting supported Italian stocks, even though some investors warned about the risk of rushing back into the market.

Italy’s anti-establishment 5-Star Movement and League parties will seek the backing of the president later on Monday for a prime minister to lead a government whose plans to jack up spending were roiling financial markets.

Shares in banks BPER Banca (EMII.MI) and UBI (UBI.MI) and carmaker Fiat Chrysler (FCHA.MI) were the top gainers on the FTSE MIB benchmark index, while only drugmaker Recordati (RECI.MI) traded in negative territory.

Italy's FTSE MIB .FTMIB benchmark index suffered its biggest one-week loss since early March on Friday on worries the new government could relax fiscal discipline.

On Monday the index was still down 0.5 percent but due to a number of stocks, including heavyweight bank Intesa Sanpaolo (ISP.MI), going ex-dividend. Stripping out that effect the FTSE MIB would be trading higher. Intesa rose 1.5 percent.

FTSE MIB futures IFSc1 rose 1.3 percent.

Elsewhere, Ryanair (RYA.I) fell as much as 3.1 percent at the open. The Irish airline reported a record annual profit as it brushed off a rostering mess-up that forced it to cancel flights and sparked a dispute with pilots, but warned profits would fall back in the coming year due to higher costs and no fare growth.

Its shares however pared all losses and rose 2.6 percent.

Stock Declines Ease, Bonds Gain as Dollar Edges Up: Markets Wrap

European Stock Markets

U.S. equity futures steadied alongside European stocks as global markets regained some composure following a hectic Tuesday session. The dollar rose a fourth day as concerns surrounding Italy weighed on the euro, and Treasury yields edged lower after their spike a day earlier.

Contracts for the S&P 500, Dow Jones and Nasdaq were all directionless as the Stoxx Europe 600 Index drifted. Equities in Asia nudged lower, with shares in Japan and Hong Kong declining while Australia’s main gauge eked out a gain and Korean stocks were little changed.

Italian bonds slumped and the country’s stocks underperformed as populist parties struggling to form a government discussed a potential government debt write-down. The common currency fell a third day, but core European bonds followed Treasuries higher.

Wednesday’s relative stability will be welcomed by many investors, given that fresh uncertainty about the U.S.-North Korea summit is surfacing just as violence flares in Gaza, the IMF warns on the threat protectionism poses to global growth, and Italy stands on the brink of a euro-skeptic government.

Against that backdrop U.S. Treasury yields, which act as a benchmark for global borrowing costs, have been rising as traders boost bets the Federal Reserve will accelerate monetary tightening. That’s helped drive a dollar rally and sucked cash from some other asset classes.

Elsewhere, emerging-market equities steadied following Tuesday’s plunge, but developing currencies turned lower and the lira weakened again. The Thai baht, South Korean won and Indonesian rupiah led Asian declines. The Malaysian ringgit fell for a sixth day after overseas investors pulled out a net $376 million from stocks over Monday and Tuesday in the wake of last week’s election.
Stocks

The Stoxx Europe 600 Index gained less than 0.05 percent as of 6:12 a.m. New York time, the highest in almost 15 weeks.

Futures on the S&P 500 Index dipped less than 0.05 percent to the lowest in a week.

The U.K.’s FTSE 100 Index advanced less than 0.05 percent to the highest in 16 weeks.
Germany’s DAX Index advanced 0.2 percent.
The MSCI Emerging Market Index was unchanged at the lowest in a week.
The MSCI Asia Pacific Index sank 0.1 percent.

Currencies
The Bloomberg Dollar Spot Index climbed 0.2 percent to the highest in 20 weeks.
The euro fell 0.3 percent to $1.1797, the weakest in more than 21 weeks.
The British pound declined 0.2 percent to $1.3471, the weakest in almost 20 weeks.
The Japanese yen increased 0.2 percent to 110.18 per dollar.

Bonds
The yield on 10-year Treasuries decreased one basis point to 3.06 percent.
Germany’s 10-year yield declined three basis points to 0.62 percent, the biggest drop in almost two weeks.
Britain’s 10-year yield dipped two basis points to 1.493 percent.

Stocks Struggle Amid Risk-Off Mood; Dollar Climbs

Global Stock Markets

There was a risk-off flavor to markets on Tuesday, with U.S. stock futures slipping, European equities struggling for traction and declines across Asia as investors grappled with worries around trade, growth and geopolitics. The dollar rallied, a bond sell-off deepened, and oil advanced.

 

The Stoxx Europe 600 Index edged higher led by energy shares, gradually overcoming a plunge in telecom companies. Equity benchmarks fell in South Korea and Australia earlier, while they rose in Shanghai and dropped in Hong Kong after data showed China’s economic momentum holding up but investment slowing. Treasury yields once again climbed above 3 percent. The euro slid after German growth data disappointed.

What began as a sell-off in European bonds on Monday -- off the back of hawkish comments from an ECB official -- picked up steam through the U.S. session and carried through to Asia. Rising yields, a stronger dollar and sliding stocks are fast becoming a familiar and uncomfortable cocktail for investors. Now violence in the Middle East, the U.S.-China trade spat, uncertainty on Italy’s government and global growth concerns are helping cement the prevailing sentiment.

Despite the sour mood, established safe-haven assets failed to catch a bid. Gold and the yen slipped, while the Swiss franc edged lower.

Elsewhere, the Turkish lira hit a new low after President Recep Tayyip Erdogan said he intends to tighten his grip on the economy and take more responsibility for monetary policy if he wins an election next month. Emerging-market stocks slumped.
tocks
The Stoxx Europe 600 Index increased 0.1 percent as of 7:30 a.m. New York time.
Futures on the S&P 500 Index fell 0.3 percent, the first retreat in almost two weeks.
The MSCI All-Country World Index dipped 0.4 percent, the first retreat in a week and the largest decrease in more than a week.
The U.K.’s FTSE 100 Index gained 0.2 percent to the highest in 16 weeks.
Germany’s DAX Index climbed less than 0.05 percent.
The MSCI Emerging Market Index sank 1.3 percent, the first retreat in more than a week and the biggest tumble in more than three weeks.
The MSCI Asia Pacific Index sank 0.9 percent, the largest decrease in more than three weeks.

Currencies
The Bloomberg Dollar Spot Index jumped 0.4 percent, the biggest increase in two weeks.
The euro fell 0.4 percent to $1.1884, the largest fall in a week.
The British pound declined 0.2 percent to $1.3524, the biggest drop in more than a week.
The Japanese yen dipped 0.3 percent to 109.94 per dollar, the weakest in more than 14 weeks.

Bonds
The yield on 10-year Treasuries climbed two basis points to 3.02 percent, the highest in almost three weeks.
Germany’s 10-year yield increased two basis points to 0.63 percent, the highest in almost three weeks.
Britain’s 10-year yield gained two basis points to 1.492 percent, the highest in almost three weeks.

World Stocks Hit 3-week high with rising oil prices

Global Stock Markets

World stocks hit a three-week high on Thursday and turned positive for the year as rising oil prices gave energy firms a shot in the arm that countered the effects of increased political uncertainty. 

Brent crude rose to another 3-1/2 year high of $77.89 overnight amid fears of supply disruptions after President Donald Trump withdrew the United States from a nuclear accord with Iran and ordered sanctions to be reimposed.

The dollar meanwhile eased slightly from 2018 highs ahead of U.S. April inflation numbers later on Thursday and as currency markets eyed the Bank of England’s policy meeting and inflation report.

Energy shares led Asian stock indexes higher, pushing the 47-country MSCI world equity index to its highest level in three weeks. It is now positive on the year, up 0.3 percent from its starting level on Jan. 1.

European shares largely took their cues from Asian and U.S. peers and rose, but the gains were tempered as British phone company BT reported disappointing results and the pan European STOXX 600 Index was only marginally higher.

Britain’s FTSE 100 Index was still up on the day ahead of a Bank of England policy meeting at which rates are expected to be kept on hold, a sea change from expectations a few weeks ago, when a hike seemed nailed on.

Overall, the U.S. Federal Reserve remains the only major central bank that appears to be on course for rate hikes, with New Zealand’s Reserve Bank saying it will keeping the Official Cash Rate (OCR) at 1.75 percent “for some time to come”.

The New Zealand dollar retreated to a five-month low of $0.6915.

Italian government debt sold off sharply in early trades, with 10-year yields hitting a seven-week high as Italy’s 5-Star Movement and the far-right League moved closer to the formation of a government of anti-establishment parties.

A crucial obstacle was removed late on Wednesday when former prime minister Silvio Berlusconi, the League’s main ally, gave his green light to the talks, accepting a demand from 5-Star that his Forza Italia party take no part in the next government.

Nor is this the only electoral concern on investor minds today; in Malaysia, an alliance of opposition parties spearheaded by Mahathir Mohamad won the general election, putting the 92-year old
strongman on course for a return to the prime minister’s office he occupied for 22 years.

Over the past day the Malaysian ringgit has slid nearly 3 percent in the one-month non-deliverable forward market and the cost of insuring the country’s debt against default has risen.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.6 percent, while Japan’s Nikkei climbed 0.3 percent. South Korea’s KOSPI rose 0.5 percent and Shanghai SSEC was 0.2 percent higher.

Brent crude futures were up 0.8 percent to $77.66 a barrel, the highest since November 2014 and building on gains of about 3 percent on Wednesday. U.S. light crude futures were up 0.6 percent at $71.59.

Treasury Yield Hits 3% as Oil Jumps followed by Trump's decision on Iran

Global Stock Markets

Crude rallied as traders digested President Donald Trump’s decision to walk away from a nuclear deal with Iran. Energy producers shored up European stocks, while U.S. futures also rose and the dollar reversed a gain even as 10-yield Treasury yields topped 3 percent ahead of a bond auction.

West Texas oil reversed Tuesday’s slump to trade at about $71 per barrel, while Brent hit $77 as the market came to terms with a U.S. message that buyers of Iranian crude have six months to curb their purchases.

The Stoxx Europe 600 Index advanced a fourth day as energy companies surged, and contracts for the S&P 500, Dow Jones and Nasdaq followed suit. The MSCI Asia Pacific Index fell. Having erased its 2018 losses earlier this week, the greenback gave up an earlier advance to trade slightly lower. Most metals fell.

The threat of increased geopolitical tension in the Middle East is buffeting global sentiment just as concern spreads over the implications of higher Treasury yields and a stronger dollar. Wednesday brings with it a $25 billion auction of 10-year U.S. notes, with investors waiting to see if the new bonds will carry a 3 percent coupon for the first time in almost seven years.

Elsewhere, Indonesia’s rupiah fell to a fresh 29-month low on worries about capital outflows from emerging markets. Turkey’s lira whipped from a loss to a gain as President Recep Tayyip Erdogan was said to be calling a meeting with officials to discuss the exchange rate, fueling speculation that authorities may take measures to stem a market rout. Gold dropped.

The Stoxx Europe 600 Index gained 0.2 percent as of 7:51 a.m. New York time, the highest in almost 14 weeks.

Futures on the S&P 500 Index increased 0.4 percent, reaching the highest in almost three weeks on its fifth consecutive advance.

The MSCI All-Country World Index climbed 0.1 percent to the highest in more than a week.

The U.K.’s FTSE 100 Index rose 0.4 percent to the highest in more than 14 weeks.

Germany’s DAX Index dipped 0.1 percent.

The MSCI Emerging Market Index rose 0.2 percent to the highest in a week.

The MSCI Asia Pacific Index sank 0.3 percent.

The euro increased 0.1 percent to $1.188. The British pound increased 0.3 percent to $1.3588, the strongest in more than a week on the biggest increase in more than three weeks. The Japanese yen declined 0.6 percent to 109.75 per dollar, the weakest in a week on the largest drop in more than two weeks.

The yield on 10-year Treasuries increased two basis points to 3.00 percent, the highest in two weeks.
Germany’s 10-year yield climbed one basis point to 0.58 percent, the highest in a week. Britain’s 10-year yield gained four basis points to 1.444 percent, the highest in almost two weeks.


 West Texas Intermediate crude increased 2.9 percent to $71.03 a barrel, the highest in more than three years on the largest climb in three weeks. Copper climbed less than 0.05 percent to $3.06 a pound. Gold fell 0.3 percent to $1,311.13 an ounce, the weakest in a week on the largest fall in more than a week.

World Stocks Advance as Results Roll In, Treasuries Jump

Global Stock Markets

U.S. equity futures pointed to a higher open with strong earnings lifting Facebook Inc. and Qualcomm Corp., though gains were muted as investors remained cautious about the prospects for future growth. The euro stayed higher as the ECB kept interest rates unchanged.

With the common currency holding gains ahead of a press conference from ECB President Mario Draghi, the dollar pulled back from a three-month high. The pound gained alongside the yen. European bonds tracked a jump in Treasuries, with the yield on 10-year U.S. notes falling below 3 percent.

Following a mixed start, most national stock gauges in Europe turned positive, pushing the Stoxx Europe 600 Index into the green and toward its first advance in three days. Automakers were among the gainers after China was said to be considering proposals to cut import duty on passenger cars. In Asia, shares in Korea and Japan rose as those in China and Hong Kong fell.

With the earnings season in full swing, investors are confronting the question of whether global equities will be able to cope with higher interest rates. Signs of optimism from Facebook Inc. and Samsung Electronics Co. are helping offset pockets of concern around technology and industrial companies that have weighed on gauges this month.

Elsewhere, West Texas crude extended an advance above $68 a barrel as French President Emmanuel Macron predicted U.S. President Donald Trump will withdraw from the Iran nuclear deal, casting a cloud over Middle East geopolitics.

Stocks
The Stoxx Europe 600 Index climbed 0.4 percent as of 12:52 p.m. London time, the largest increase in more than a week.
Futures on the S&P 500 Index increased 0.3 percent.
The MSCI All-Country World Index advanced 0.1 percent, the first advance in more than a week.
The U.K.’s FTSE 100 Index increased 0.1 percent.
Germany’s DAX Index gained 0.1 percent.
The MSCI Emerging Market Index jumped 0.2 percent, the first advance in a week.
The MSCI Asia Pacific Index climbed 0.1 percent.

Currencies
The euro increased 0.1 percent to $1.2178.
The British pound gained 0.2 percent to $1.3964.
The Japanese yen jumped 0.2 percent to 109.17 per dollar, the first advance in more than a week and the largest climb in more than two weeks.

Bonds
The yield on 10-year Treasuries sank three basis points to 3.00 percent, the first retreat in more than a week and the biggest tumble in almost three weeks.
Germany’s 10-year yield sank two basis points to 0.61 percent, the largest tumble in almost three weeks.
Britain’s 10-year yield decreased two basis points to 1.52 percent.

Commodities
West Texas Intermediate crude gained 0.8 percent to $68.61 a barrel, the largest rise in more than a week.
Copper decreased 0.9 percent to $3.13 a pound, the lowest in more than a week on the biggest dip in two weeks.
Gold climbed 0.1 percent to $1,324.69 an ounce.

Global stocks sag as key Trump adviser quits, stoking trade war fears

Global Stock Markets

Global stocks and the dollar fell on Wednesday after a strong advocate of free trade resigned from the White House, fanning fears that U.S. President Donald Trump will proceed with protectionist tariffs and risk a trade war. 

Economic adviser Gary Cohn, seen as a bulwark against protectionist forces within the Trump administration, said on Tuesday he was leaving, sparking a global sell-off across a number of major asset classes.

MSCI’s world equity index, which tracks shares in 47 countries, was down 0.2 percent, having seen some strength in Asian trading following news that South and North Korea would hold their first summit in more than a decade.

The pan-European Stoxx 600 was down 0.4 percent, with Germany’s DAX, home to many export-led companies, down 0.5 percent.

European car-makers, which face the risk of a hike in import tariffs to the United States, were among the worst performers, falling 1.1 percent. 

Equity futures pointed to the U.S. S&P 500 index opening 0.8 percent lower.  

Cohn’s departure rippled through foreign exchange markets, with the U.S. dollar falling 0.4 percent and 0.2 percent respectively against the Japanese yen and Swiss franc — both seen as safe-havens in times of uncertainty.

The dollar is just off a 14-month low against the yen hit on Friday.

The Canadian dollar and the Mexican peso both retreated by around 0.5 percent against the dollar as Cohn’s departure was seen as raising risks that Washington could walk away from NAFTA negotiations.

Other emerging market currencies that typically move in sympathy with the dollar were lower, with the South African rand and Russian rouble both down around 0.5 percent against the dollar.

Commodities fell on worries that trade friction could slow global growth, with Brent crude futures giving up the previous day’s gains to drop 1.2 percent.

Copper on the London Metal Exchange lost 0.9 percent, paring a 1.4 percent gain from the previous session.

European government bonds rallied, with yields across the euro zone falling by 1-3 basis points, following similar strengthening in U.S. Treasuries overnight.

European Stocks Slide After Powell; Dollar Steady With Oil

European Stock Markets

Shares in Europe fell as disappointing Chinese data added to a perceived hawkish tilt in U.S. Federal Reserve policy that weighed on equities in Asia. Benchmark Treasury yields held near a four-year high and the dollar was steady after Tuesday’s jump.

Miners led a decline in the Stoxx Europe 600 gauge after lower-than-expected Chinese manufacturing data. The MSCI Asia Pacific Index dropped along with most national benchmarks in the region as Fed Chairman Jerome Powell’s upbeat assessment of the world’s biggest economy continued to reverberate through global markets. S&P 500 index futures edged higher, however, signaling a respite when U.S. markets open. The euro pared a decline, while German bunds held steady as inflation in the region slowed in line with estimates.

Investors’ focus now shifts to U.S. GDP data due Wednesday after Powell opened the door to four Fed rate increases this year, saying his personal outlook for the economy had strengthened. U.S. and European bond yields have soared in recent months amid speculation that the Fed’s monetary policy will be tightened at a faster pace, but for equity investors, that’s testing nerves. Global stocks are poised for their worst month since January 2016 after years of central-bank stimulus push up valuations.


Elsewhere, crude oil was little changed as the International Energy Agency warned about seemingly unstoppable U.S. shale production. Sterling added to yesterday’s decline as U.K. Prime Minister Theresa May squared off for a fight with the European Union over a Brexit deal.
 Stocks

    The Stoxx Europe 600 Index fell 0.3 percent as of 10:37 a.m. London time.
    The U.K.’s FTSE 100 Index fell 0.3 percent.
    Germany’s DAX Index dipped 0.2 percent.
    Futures on the S&P 500 Index gained 0.2 percent.
    The MSCI Asia Pacific Index fell 1.1 percent.
    Japan’s Topix index fell 1.2 percent, Hong Kong’s Hang Seng dropped 1.6 percent, South Korea’s Kospi declined 1.2 percent.
    Australia’s S&P/ASX 200 Index declined 0.7 percent.

Currencies

    The Bloomberg Dollar Spot Index declined 0.1 percent.
    The euro dipped less than 0.05 percent to $1.2228, the weakest in almost six weeks.
    The British pound fell 0.2 percent to $1.3882.
    The Japanese yen climbed 0.3 percent to 107.06 per dollar.

Bonds

    The yield on 10-year Treasuries gained one basis point to 2.90 percent.
    Germany’s 10-year yield dipped one basis point to 0.68 percent.
    Britain’s 10-year yield decreased two basis points to 1.561 percent.
    Japan’s 10-year yield rose one basis point to 0.053 percent.

Commodities

    West Texas Intermediate crude increased 0.1 percent to $63.05 a barrel.
    Gold gained 0.2 percent to $1,320.44 an ounce.

Global Stocks notched up; Dollar dips

Global Stock Markets

Global stocks notched further gains on Monday and the dollar stayed on the back foot, as investors bet the new head of the U.S. Federal Reserve will steer a steady course on policy when he addresses lawmakers this week.

MSCI’s index of world stocks was up 0.4 percent, with the pan-European Stoxx 600 up 0.7 percent.

Asian markets also rose, with Chinese stocks up 1.2 percent after the ruling Communist Party set the stage for President Xi Jinping to stay in office indefinitely. 

Much of the market’s focus during the coming week will be on monetary policy, with the heads of the European Central Bank and Bank of England set to give speeches. But they are likely to be overshadowed by Fed chair Jerome Powell. 

U.S. stock markets calmed on Friday after the Fed said it saw steady economic growth continuing and no serious risks on the horizon. 

Investors also seem to be wagering that Powell will stick to that script at his first appearance before the House on Tuesday, followed by testimony to the Senate on Thursday. 

The expected lack of policy surprises from Powell saw yields on U.S. 10-year Treasuries back off to 2.86 percent and away from a four-year top of 2.957 percent, dragging down the dollar. 

The currency surrendered early gains to dip 0.3 percent against a basket of currencies to 89.66. That followed a 0.8 percent bounce last week. 

Sterling was up 0.5 percent on Monday after Bank of England deputy governor Dave Ramsden said the bank might need to raise interest rates somewhat sooner than he had expected if wage growth picked up early this year. 

The pound also benefited from hopes that Britain’s exit from the European Union might be less disruptive than feared, with opposition leader Jeremy Corbyn set to give a speech on Monday backing a new customs union with the bloc. 

The euro was 0.3 percent firmer on the back of dollar weakness, though investors largely held back from taking big positions ahead of a national election in Italy and the conclusion of coalition talks in Germany. 

ECB President Mario Draghi is also set to appear before the European Parliament later in the day, while BoE governor Mark Carney speaks in Edinburgh on Friday. 

In commodities, oil prices steadied after hitting their highest level in nearly three weeks, supported by comments from top exporter Saudi Arabia that it would continue to curb shipments in line with the OPEC-led effort to cut global supplies.

Telecoms, Lloyds a bright spot on a down day for European stocks

European Stock Markets

STOXX 600 down 0.6 pct. Lloyds, Glencore rise after updates. Telecoms results also a highlight. Bond yields still a worry

European shares retreated on Wednesday, under pressure from a continued rise in bond yields, though well-received results from telecom companies, bank Lloyds and miner Glencore helped limit the declines. 

Europe’s pan-European STOXX 600 index was down 0.6 percent by 0954 GMT, while Germany’s DAX also fell 0.7 percent. 

Another milestone in U.S. treasuries -- the two-year bill yield touched 2.282 percent, the highest since September 2008 -- was a fresh reminder to investors of the tightening rate environment that triggered recent sharp falls in global equities. 

Though telecoms gave up early gains to trade slightly negative, their 0.1 percent fall still outperformed the broader market after Telefonica Deutschland and Orange both signalled some relief from the heavy downward pressure on prices of recent years. 

Orange’s finance chief said the group remained available for consolidation talks in France. The comment failed to boost shares in its local peers, underlining the big obstacles to M&A in the sector.

Earnings updates from bank Lloyds and housebuilder Barratt Developments saw their shares rise. 

Glencore’s shares jumped 4 percent, helping the basic resources index rise into positive territory, following a set of full-year results its Chief Executive described as the miner’s “strongest on record”. 

Declines among European stocks were broad-based, however, with industrials and the more defensive health care and consumer staples sectors taking the most points off the STOXX 600. 

Around halfway through earnings season, more than half of MSCI Europe firms have either met or beaten analysts’ earnings expectations, with the bulk of beats concentrated in tech stocks and the energy sector.

Equity strategists at UBS said that the fourth quarter earnings season in Europe was “unseasonably strong” as earnings had been revised up, and not down. 

“Whilst attention has clearly been elsewhere over the last few weeks, given the correction in equities and sharp rise in volatility, the underlying earnings season has been quietly delivering the goods,” UBS equity strategists said in a note.

Europe Stocks Drop, Bonds Gain; Treasuries Steady

European Stock Markets

European stocks retreated on Wednesday, shrugging off gains in the Asia session as traders brace for a busy second half of the week. 

The region’s bonds advanced, Treasuries were flat and the dollar extended gains before another round of U.S. debt sales and the release of minutes from the latest Fed meeting.

Almost every sector of the Stoxx Europe 600 Index fell, with the gauge tracking losses in the U.S. on Tuesday rather than the more positive mood in Asia. Stocks rose in Hong Kong, cementing a rebound from one of the worst sell-offs in years at the start of the month. 

S&P 500 Index futures edged lower. Benchmark Treasury yields steadied, but remain near recent highs as the U.S. government continues its a big week for debt auctions.

The Treasury’s $258 billion of auctions slated for this week comes amid surging rates that gave impetus to one of the steepest equity sell-offs in years two weeks ago. 

While investors seem to have adjusted to 10-year yields at a four-year high for now, the deluge of supply could push them higher, weakening the case for owning stocks at elevated valuations.

Investor attention will also be on minutes from the Federal Reserve’s most recent meeting, due Wednesday in New York. On Thursday they will get to parse minutes from the last European Central Bank gathering.

Elsewhere, oil in New York dropped toward $61 a barrel ahead of U.S. government data that’s forecast to show crude inventories gained for a fourth week. Bitcoin slipped, but pared its decline to hover above $11,000.

European Shares Mixed As Markets Look To FOMC Minutes

European Stock Markets

Firmer oil prices and the dollar recovery ahead of the FOMC meeting minutes coming out tomorrow helped to lift European stocks higher on Tuesday, although U.K stocks fell slightly in view of disappointing earnings updates from the likes of HSBC Holdings and BHP Billiton. 

The pan-European Stoxx Europe 600 index was up 0.10 percent at 378.62 in late opening deals after declining 0.6 percent on Monday.

The German DAX and France's CAC 40 were up around 0.2 percent, while the U.K.'s FTSE 100 was losing 0.4 percent.

Edenred shares jumped more than 7 percent in Paris after the prepaid meal voucher and card provider reported record 2017 earnings and hiked dividend.

Covestro, the company formed by the spin off of Bayer's specialty plastics division, climbed nearly 2 percent after its fourth-quarter net profit increased more-than fourfold.

HeidelbergCement advanced 1.7 percent on reporting a 16 percent rise in Q4 core profit on higher sales.

Software firm Temenos tumbled 6 percent amid reports that it was in advance talks to buy U.K. rival Fidessa Group.

HSBC Holdings dropped over 4 percent after its full-year pre-tax profit, adjusted for one-off items and currency fluctuations, fell short of market forecasts.

Mining heavyweight BHP Billiton tumbled 3.5 percent despite the company reporting strong half-year underlying profit and hiking its interim dividend.

Intercontinental Hotels shares slumped 5 percent after the hotel conglomerate announced a series of new initiatives and said it would not pay out any additional capital to investors in 2018.

European share rebound loses steam, steel stocks gain on US move

European Stock Markets

European shares dipped in choppy trade on Monday as a poor update from Reckitt Benckiser (RB.L) hit consumer staples, outweighing gains among financials and strength in steel makers after the U.S. outlined proposals for hefty import curbs. 

Shares in Tenaris (TENR.MI), Outokumpu (OUT1V.HE) and Arcelor Mittal (MT.AS) - which have facilities in the United States - were the biggest gainers in Europe, up between 1.7 and 3.1 percent.

Their gains and strength in financial stocks helped STOXX 600 post small gains at the open but the pan-European benchmark index was later dragged lower by a fall in consumer staple stocks. The index was down 0.1 percent by 0930 GMT.

Monday’s slight decline took place after the STOXX posted a 3.3 percent gain last week when strength of corporate updates and a return of inflows into equity funds helped global equities rebound from a turbulent start of the month.

The index needs to rise another six percent to climb back to the 2-1/2 year peak hit at the end of January.

Reckitt Benckiser (RB.L) missed profit expectations and its profit margins declined, hurt by a tougher pricing environment in developed markets and increased commodity costs. It said these issues would continue in the near term. [nL8N1Q910Z]

Reckitt Benckiser (RB.L), the maker of Durex condoms, Lysol disinfectant and Mucinex cold medicine, fell 5.4 percent. Shares in Unilever (ULVR.L), Diageo (DGE.L), Nestle (NESN.S) and Danone (DANO.PA) also declined.

Analyst at Investec affirmed their sell rating on Reckitt following the update, saying operating margin missed expectations and sales growth fell a little short of the more optimistic hopes given the strong flu performance from peers.

The U.S. Commerce Department has recommended that President Donald Trump impose steep curbs on steel and aluminum imports from China and other countries ranging from global and country-specific tariffs to broad import quotas. [nL2N1Q60V8]

Morgan Stanley analysts said the European Commission could respond with measures to limit steel imports to the European Union, and that ArcelorMittal and SSAB (SSABa.ST) would benefit the most from rising U.S. spreads. SSAB rose 2.5 percent.

Banks .SX7P were among the leading gainers, up 0.4 percent. The sector was supported by a 1.6 percent gain in shares of Deutsche Bank (DBKGn.DE) after analysts at BofA Merrill Lynch upgraded the German lender to neutral on optimism over investment banking trading revenues. [nL8N1Q911U]

German industrial giant Siemens (SIEGn.DE) rose one percent after announcing plans to list its healthcare division in the first half of the year.

Mercedes maker Daimler (DAIGn.DE) was a weak spot, down 1.7 percent, after reports said U.S. investigators probing Daimler had found that its cars were equipped with software which may have help them to pass diesel emissions tests. [nL8N1Q8080]

Strong earnings help European shares recover

European Stock Markets

European shares were set to chalk up healthy weekly gains on Friday, snapping a three-week losing streak as earnings updates continued to impress, and volatility and jitters over rising inflation eased. 

 Gains in the energy sector .SXEP on rising oil prices CLc1 and solid reports from large-cap companies including Schneider (SCHN.PA), Eni (ENI.MI) and Renault (RENA.PA) lifted the STOXX 600 index 0.9 percent.

The pan-European benchmark is up 3 percent so far this week, set for its best week since December 2016, but still down around 6 percent from the 2-1/2-year peak it hit in January.

Among country benchmarks, the UK's FTSE .FTSE was up 0.6 percent and Germany's DAX .GDAXI added 0.8 percent, while Italy's FTSE MIB .FTMIB outperformed, up 1.2 percent.

This week’s recovery follows a turbulent start to February, when worries that rising U.S. inflation could trigger faster interest rate hikes caused a global sell-off in equities.

The euro zone’s volatility index .V2TX dipped and remained well below the 19-month peak it reached earlier this month.

European fourth-quarter earnings are seen rising 14.6 percent, a big upwards revision from last week’s 11 percent growth forecast and following 15 weeks characterised by a string of downgrades.

That brought Europe to just below the 14.8 percent growth rate expected for the S&P 500, though earnings beats in the U.S. stand at 78 percent versus 50 percent in Europe.

On the day, the biggest gainer in Europe was Vopak (VOPA.AS), up 14.9 percent after earnings at the Dutch oil and chemical storage firm fell less than expected.

French satellite operator Eutelsat (ETL.PA) soared 5.8 percent following its update. Even though its first-half core profit fell 7.4 percent, weighed down by slowing demand in its video division, one trader said net profit beat expectations and cost-cutting surprised positively.

Food giant Danone’s (DANO.PA) shares rose 1.2 percent after it published 2017 results.

Swedish defence firm Saab (SAABb.ST) plummeted 10 percent, leading losers in Europe after it posted fourth-quarter operating earnings below analysts’ forecasts and proposed a smaller dividend hike than expected.

Air France was another top faller, down 5.8 percent. Its shares reversed course after a positive open that traders linked to the airline’s positive comments on pricing.

Roche (ROG.S) gained 0.9 percent after the Swiss drugmaker said it would buy the rest of Flatiron Health for $1.9 billion to speed development of cancer medicines.

European shares go sideways as scepticism looms on recovery

European Stock Markets

European shares faltered on Tuesday morning in contrast with Wall Street which bounced back for a second day overnight, and as a flurry of corporate results failed to lift indexes. 

The pan-European STOXX 600 index was just slightly negative, down 0.02 percent at 0920 GMT with bourses and sectors trading sideways in the absence of a clear upward or downward trend. 

A flurry of corporate results yielded both positive and negative reactions on European trading floors.

The telecoms sector suffered after Telenet (TNET.BR) reported 2017 results. 

The Belgian operator fell over 7 percent, the worst performer on the STOXX. 

Shares in Gucci owner Kering (PRTP.PA) slid 2.6 percent despite the luxury group reporting stronger-than-expected Q4 sales growth.

Rival LVMH (LVMH.PA) lost 1.2 percent. 

Smelter Aurubis (NAFG.DE) fell about 4 percent after its results fell short of the average forecast in a Reuters poll.

On the other hand, shares in French video game producer Ubisoft (UBIP.PA) rose 5.1 percent after a trading update which took it to the top of the STOXX 600.

Randstad (RAND.AS), the world’s second-largest staffing company and a bellwether for the economy, saw fourth-quarter core profit rise 15 percent, buoyed by a strong recovery in the European job markets. Its shares gained 0.9 percent.

European travel group TUI (TUIT.L) was the best performer of the FTSE and rose 4.6 percent after reporting that summer bookings for Turkey were recovering, echoing comments by rival Thomas Cook and adding to hopes that pressure on profit margins for tour operators may ease. 

The travel and leisure sector .SXTP was among the few to trade firmly in positive territory, up 0.9 percent, with Lufthansa (LHAG.DE) and Easyjet (EZJ.L) up 1.9 percent and 1.7 percent respectively.

Jittery world stocks clamber off two-month lows

Global Stock Markets

World stocks clawed their way back from two-month lows on Wednesday, though momentum was weak and U.S. futures suggested Wall Street could lapse back into losses after rebounding from the biggest selloff in six years. 

European shares opened firmer after plumbing six-month depths on Tuesday, the tail-end of a selloff induced by a volatility spike that took Wall Street’s fear gauge, the VIX index, as high as 50, more than three times its closing level last Thursday.

That rout had wiped $4 trillion off world equities and sent investors scurrying for the safety of German and U.S. bonds, briefly reversing the steady rise in global yields.

MSCI’s all-country index, however, was up 0.25 percent after four days in the red, boosted by gains in Europe, Japan and emerging markets.

As calm returned, bond buying by panicky investors also abated and yields on “safe” German, Japanese and U.S. debt edged up, resuming the trend of recent weeks as markets price further U.S. rate rises and the withdrawal of stimulus in Europe.

Yields on Germany’s 10-year government bond, the euro zone benchmark, were around 0.69 percent, having plunged to 0.66 percent on Tuesday..

Markets are also on edge over U.S. lawmakers’ wrangling to extend the so-called debt ceiling - funding for the U.S. government runs out on Feb. 8 unless a stopgap bill manages to pass the Senate later on Wednesday.
U.S. 10-year yields rose back as high as 2.80 percent after approaching two-week lows around 2.65 percent on Tuesday.

 

With the pivotal gauge of S&P 500 volatility, the VIX, opening at a relatively elevated 31 percent, equity markets are not out of the woods, especially in the United States. 

European shares were positioned for a strong session after seven days of losses, with a pan-European index up 0.7 percent thanks also to a series of robust company earnings reports.

German shares rose 0.6 percent, adding gains after news of a government coalition deal, with Social

Democrats likely taking the key finance portfolio. Southern European bonds, generally seen as riskier assets, also rallied, with yields on Italian, Spanish and Portuguese debt down 5-8 basis points.

MSCI’s emerging equity index was modestly firmer, and unlike most other indexes it has clung to slender year-to-date gains.

On currency markets, which too stayed relatively calm through the rout, the dollar rose slightly against a basket of currencies but fell half a percent to the yen.
Sterling meanwhile was down for the fourth straight day against the dollar, hurt by recent surveys confirming the economy’s fragile state and fresh tensions over Britain’s divorce negotiations with the European Union.

Investors are awaiting Thursday’s Bank of England meeting which should provide an update on authorities’ views on the economy and timing of the next interest rate rise.

Earlier in the day, China’s yuan rose 0.4 percent to the highest since August 2015 when authorities conducted a one-off devaluation.

European shares snap seven-day losing streak

European Stock Markets

European shares broke a seven-day losing streak on Wednesday as investors took heart from a strong bounce on Wall Street at the end of a rollercoaster session. 

All sectors in Europe were trading in positive territory, helping the pan-European STOXX 600 index to rise 0.7 percent by 0851 GMT. The index is down 3.5 percent year-to-date.

Traders said further turbulence ahead could not be ruled out as volatility remained high in the wake of historic stock market declines caused by worries over inflation. Wall Street futures were pointing to a weaker open on Thursday.

A number of well-received company updates also provided support.

Hexagon soared 7 percent to lead gainers on the STOXX after the Swedish industrial technology company reported fourth-quarter core earnings ahead of analyst forecasts.

Statoil rose more than 2 percent. The Norwegian oil producer said it would raise its dividend after beating fourth-quarter earnings forecasts, helped by higher oil prices.

Miner Rio Tinto shares edged up 0.1 percent, paring back earlier gains as its record dividend fail to impress investors.

Delivery Hero and insurer Hannover Re also rose on the back of strong results.

Some disappointed, with ABN Amro falling 3.4 percent. The Dutch bank beat analyst expectations with a 63 percent jump in fourth-quarter net profit, but some traders voiced concerns over cash returns, saying it was light on capital.

Enzyme maker Novozymes and brewer Carlsberg also fell sharply following their updates.

According to recent data, 48.2 percent of STOXX 600 companies that have reported results so far exceeded earnings estimates. That’s below the 50 percent beat seen in a typical quarter. Revenue beats at 57.3 percent however are above a typical quarter.

Elsewhere, Tesco fell 0.7 percent after reports that the retailer is facing Britain’s largest ever equal pay claim and a possible compensation bill of up to 4 billion pounds.

Among country benchmarks, the UK’s FTSE added 0.6 percent, while Germany’s DAX rose 0.4 percent. The German index showed little immediate reaction to reports about developments between Conservatives and Social Democrats over a coalition government deal.

Global Stocks Tumble as Wall Street Braces for More Losses

Global Stock Markets

Stock markets around the world are taking a battering following a dramatic sell-off on Wall Street.
 

Stock markets around the world took a battering Tuesday, following a dramatic sell-off on Wall Street that triggered concerns that a potentially healthy pullback from record highs could turn into a bear market.

Hopes that Wall Street won't repeat the scale of Monday's losses helped limit the selling during European trading hours. Futures markets suggested another, but more limited drop, in the U.S., with the Dow and S&P 500 futures down 0.9 percent and 0.5 percent.

The drop, which gathered pace Monday when the Dow Jones industrial average posted its biggest percentage decline since August 2011, has been fueled by fears the U.S. Federal Reserve will raise interest rates faster than expected due to a pick-up in wages.

That has fed into widespread concerns that markets were stretched following a strong run over the past year that pushed many indexes to record highs. Some also questions the possible role of computer-driven algorithmic trading in the precipitous declines.

Among the biggest fallers on Tuesday was Tokyo's Nikkei 225 stock average, which ended 4.7 percent lower at 21,610.24, having earlier been down a massive 7 percent. 

All other Asian markets tanked, too, including the Shanghai Composite index, which closed 3.4 percent lower at 3,370.65 and Hong Kong's Hang Seng, which skidded 5.1 percent to 30,595.42. Australia's benchmark S&P ASX 200 slid 3.2 percent to 5,833.30 and South Korea's Kospi declined 1.5 percent to 2,453.31.

The selling persisted into European trading hours, though at a more moderate pace. The FTSE 100 index of leading British shares was 2.3 percent lower at 7,170 while the CAC 40 in France fell 2.2 percent to 5,171. Germany's DAX was down 2.1 percent at 12,423.

Though many stock indexes are close to where they started the year, the losses mark a major reverse following a sustained period of gains, a pullback that market pros have been predicting for some time.

A 10 percent drop from a peak is often referred to as a "correction" while a bear market is generally defined as a 20 percent or so drop in indexes. The S&P 500, for example, has fallen 7.8 percent since it set its latest record high on Jan. 26.

Despite the sea of red in global stock markets, there are hopes that the retreat won't last long given that global economic growth has picked up and the financial system is more robust since the financial crisis.

The catalyst for the latest sell-off came in jobs figures last Friday showing that wage growth in the U.S. was creeping higher. For many traders, that was a sign that the Fed will have to pick up the pace of its rate hikes — higher wages have the capacity to fuel inflation.

On Monday, the Dow finished down 4.6 percent at 24,345.75, while the S&P 500 sank 4.1 percent, to 2,648.94. Falls like this have not been registered since August 2011 when investors were fretting over Europe's debt crisis and the debt ceiling impasse in Washington that prompted a U.S. credit rating downgrade.

Still, while some financial assets became more attractive to investors as perceived havens of value. Gold, for example, was up 0.5 percent at $1,343 an ounce.

The U.S. dollar remained resilient despite the stock market sell-off, which at one stage Monday saw the Dow shed 1,597 points. The euro was up 0.4 percent at $1.2415 while the dollar rose 0.1 percent to 109.22 yen.