(Bloomberg) — European stocks rose along with U.S. stock futures on blockbuster earnings from Microsoft and Alphabet. The yen fell to its lowest level in 34 years after the Bank of Japan left its key interest rates unchanged.
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The Stoxx Europe 600 rose 0.5%, heading for its first weekly gain in four years, with the technology sector the main gainer. Miners rose as copper prices hit $10,000 a tonne for the first time in two years, but Anglo American underperformed after rejecting BHP Group’s $39 billion takeover offer.
ThyssenKrupp AG soared more than 10% after Czech billionaire Daniel Kreczynski’s EP Group of Companies agreed to take a 20% stake in the troubled German company’s steel division. Amundi SA rose after it reported net inflows for the first quarter that were above the average analyst estimate. NatWest Group Plc rose above profit.
Fills in the S&P 500 and Nasdaq 100 suggested the underlying index is on track to recover from Thursday’s decline. That came after Alphabet announced a dividend after significantly lower than expected sales. Fellow giant Microsoft also beat expectations, boosted by corporate demand for the software maker’s cloud and artificial intelligence products.
About 79% of S&P 500 companies so far have beat analysts’ earnings expectations, according to JPMorgan Chase & Co. strategists. Still, the stock’s reaction has been underwhelming, with better-than-expected earnings yielding below-average upside, while worse-than-expected earnings are being penalized more than usual, the strategists wrote.
While earnings growth continues, Friday’s focus will also be on U.S. statistics, with a particular focus on inflation measures recommended by the Federal Reserve. US Treasury yields fell after yesterday’s decline in economic data that dampened expectations for policy easing. The dollar exchange rate was stable.
Positive earnings news from the United States helped some of Asia’s tech giants, including Samsung Electronics, Taiwan Semiconductor Manufacturing and Tencent Holdings, rally on Friday. Stock benchmarks in Japan, South Korea, Taiwan, and China all rose.
In Japan, following the Bank of Japan’s decision, the yen reversed its initial rise and fell to 156 yen to the dollar, its lowest level since 1990. The central bank on Friday kept its policy interest rate unchanged at 0-0.1%, as expected by most economists, according to a statement.
“The Bank of Japan definitely sees upside risks to inflation,” Peiqiang Liu, Asia economist at Fidelity International, said on Bloomberg TV. He said the yen’s decline reflected the disappointment of investors who had expected a more hawkish stance from the central bank.
US core PCE price index data released on Thursday rose 3.7%, higher than expected. This print, combined with US gross domestic product data that fell short of all forecasts, reignited fears of stagflation. The core PCE deflator, the Fed’s preferred inflation measure, is expected to be released later Friday.
Elsewhere, gold edged higher on Friday as precious metals headed for weekly declines. West Texas Intermediate rose to its highest point in more than a week, on pace for weekly gains.
This week’s main events:
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US Personal Income and Expenditures, PCE Deflator, University of Michigan Consumer Sentiment, Friday
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ExxonMobil, Chevron earnings, Friday
The main movements in the market are:
stock
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As of 8:29 a.m. London time, the Stoxx European 600 was up 0.5%.
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S&P 500 futures rose 0.8%
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Nasdaq 100 futures rise 1%
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Dow Jones Industrial Average futures rose 0.1%.
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MSCI Asia Pacific index rises 0.5%
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MSCI Emerging Markets Index rises 1%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was unchanged at $1.0730.
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The Japanese yen fell 0.7% to 156.81 yen to the dollar.
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The offshore yuan was almost unchanged at 7.2597 yuan to the dollar.
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The British pound fell 0.1% to $1.2501.
cryptocurrency
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Bitcoin fell 0.5% to $64,483.21.
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Ether fell 1% to $3,141.83.
bond
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The 10-year Treasury yield fell 2 basis points to 4.68%.
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Germany’s 10-year bond yield fell 2 basis points to 2.61%.
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UK 10-year bond yields fell 3 basis points to 4.33%.
merchandise
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Brent crude rose 0.7% to $89.62 per barrel
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Spot gold rose 0.5% to $2,343.91 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Rita Nazareth.
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