Friday, January 21

European stocks rise with the dollar; fall in treasuries: markets engulf


Most stocks rose on Thursday as traders bet the global recovery will be resistant to the new strain of virus that is spreading around the world.

Telecommunications stocks led a rise in Europe’s Stoxx 600 index, while energy companies fell. MSCI Inc.’s indicator of Asia Pacific equities advanced for a third day, led by Hong Kong and China, where policy makers seek to prop up the economy. US contracts fell after the high-tech S&P 500 and Nasdaq 100 extended a rally.

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The British pound hit its lowest level this year as Goldman Sachs Group Inc. delayed its forecast for a rate hike in the UK amid omicron uncertainty. UK business groups called for government support after Prime Minister Boris Johnson announced restrictions to curb the spread of the variant, which Bloomberg Economics estimates could cost the economy up to £ 2bn (£ 2.6bn). million dollars) per month.

The dollar rose and crude held, while Treasuries fell. China’s central bank set its benchmark rate for the yuan at a weaker-than-expected level against the dollar, signaling its unease with the currency’s recent rally.

Among individual moves, shares in LPP, Poland’s largest clothing retailer, and British boot maker Dr. Martens Plc rose after reporting gains. Meanwhile, Zur Rose Group AG fell after offering discounted shares and Electricite de France fell after Le Figaro said the government is considering additional measures to prevent electricity prices from rising too high amid rising costs. of energy.

The rally in global equities will be put to the test as traders wait for more volatility until there is more clarity on the omicron variant threat to the economy, and ahead of US consumer inflation figures this week and a meeting of the Federal Reserve next week that may provide clues to the pace of the decline. and the interest rate goes up.

“We expect to have a potential increase in volatility even if the market continues to rise around those events next week,” Frances Stacy, portfolio strategist at Optimal Capital, said on Bloomberg Television. “Many of the catalysts that gave us this Covid boom are slowing down. And then we have the Fed potentially entering a slowing economy. ”

In China, factory inflation has slowed, suggesting there is more room for measures to support the economy. Meanwhile, the nation’s indebted developers remain under scrutiny. Fitch Ratings cut property developers China Evergrande Group and Kaisa Group Holdings Ltd. to restricted default.

On the virus front, one study found that omicron is 4.2 times more transmissible than the delta variant in its early stages.

The Bloomberg’s Markets Live team is conducting a survey on asset views for 2022. It is anonymous, takes about 2 minutes, and the results will be shared by the end of December.

Here are some key events to watch this week:

  • Federal Reserve Bank of Minneapolis Chairman Neel Kashkari speaks Thursday
  • US CPI Friday

Some of the main movements in the markets:

Stocks

  • The Stoxx Europe 600 was up 0.2% at 8:46 am London time.
  • S&P 500 futures fell 0.2%
  • Nasdaq 100 futures fell 0.1%
  • Dow Jones Industrial Average futures fell 0.2%
  • The MSCI Asia Pacific Index rose 0.7%
  • The MSCI emerging markets index rose 0.4%

Currencies

  • Bloomberg’s dollar spot index rose 0.1%
  • The euro fell 0.2% to $ 1.1322.
  • The Japanese yen rose 0.2% to 113.48 per dollar
  • The offshore yuan changed little to 6.3439 per dollar
  • The British pound changed little to $ 1.3206

Captivity

  • The 10-year Treasury yield fell two basis points to 1.50%.
  • Germany’s 10-year yield fell two basis points to -0.33%.
  • The UK 10-year yield fell four basis points to 0.74%.

Raw Materials

  • Brent crude changed little
  • Spot gold changed little

© 2021 Bloomberg


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