Asian Stocks, Europe Futures Rise on PBOC Stimulus: Markets Wrap – Yahoo Finance

(Bloomberg) — European stocks tracked gains in Asia after the People's Bank of China announced a series of stimulus measures to bolster economic growth.

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The Stoxx Europe 600 index rose 0.9%, led by gains in sectors highly dependent on China, such as miners, luxury goods makers and automakers. Brent crude oil rose above $74 a barrel and iron ore prices also rose, lifting shares in Rio Tinto and BHP Group. U.S. stock futures rose slightly, while Treasury yields were little changed.

Risk sentiment was boosted by broad monetary stimulus measures announced by China on Tuesday, including cutting reserve requirements for banks and providing at least 800 billion yuan ($114 billion) of liquidity support to equities.Chinese stocks rose to their highest since July 2020, while the news from Beijing helped offset concerns in Europe that economic growth is slowing.

“These measures clearly show that Beijing understands and appreciates the urgency of boosting stock and housing market sentiment,” said Shiguo Chen, a portfolio manager at RBC BlueBay Asset Management. “In the short term, this will help the market find a bottom, but in the longer term, I think more fiscal support is needed.”

China's stimulus announcement came after several Federal Reserve officials on Monday said they left open the possibility of further big interest rate cuts in the United States.

Chicago Fed President Austen Goolsby said that with inflation approaching the central bank's target, the focus should shift to the labor market, “which will likely mean further rate cuts over the course of next year.” Minneapolis Fed President Neel Kashkari also pointed to the weakness in the job market and said he would support another half-percentage point rate cut by the end of the year.

Traders are betting on almost three-quarters of a percentage point of easing by the end of the year, suggesting at least one more big rate cut is on the way. Investors are now awaiting data on the Fed's preferred inflation measures and U.S. consumer spending later this week.

Emerging market stock indexes rose more than 1 percent following the announcement by People's Bank of China Governor Pan Gongsheng.

The measures included a cut in key short-term interest rates, plans to reduce the amount of money banks must hold in reserves to the lowest since at least 2018, as well as the announcement of a package to support the country's struggling property sector.

The story continues

Gold hit a new record of $2,636.16 per ounce during Asian market hours.

Major events this week:

• Nippon Jibun Bank Manufacturing PMI, Services PMI, Tuesday

• Mexican CPI, Tuesday

• Bank of Canada Governor Tiff Macklem speaks Tuesday

• Australian Consumer Price Index, Wednesday

• China medium-term lending rate, Wednesday

• Sweden's interest rate decision Wednesday

• Swiss interest rate decision on Thursday

• ECB President Christine Lagarde to speak on Thursday

• US jobless claims, durable goods and GDP revised Thursday

• Federal Reserve Chairman Jerome Powell delivered a pre-recorded speech at the 10th U.S. Treasury Market Conference on Thursday.

• Mexico interest rate decision Thursday

• Japan Tokyo Consumer Price Index, Friday

• China industrial profits, Friday

• Eurozone consumer confidence on Friday

• US PCE, University of Michigan Consumer Confidence, Friday

Some of the key market developments:

stock

• The Stoxx Europe 600 index was up 0.7% as of 8:44 a.m. London time.

• S&P 500 futures little changed

• Nasdaq 100 futures rose 0.2%

• Dow Jones Industrial Average futures were little changed

• MSCI Asia Pacific Index rose 0.9%

• MSCI Emerging Markets Index rose 1.4%

currency

• The Bloomberg Dollar Spot Index was little changed.

• The euro rose 0.1% to $1.1125.

• The Japanese yen fell 0.6% to 144.41 yen to the dollar.

• The offshore yuan rose 0.3% to 7.0372 yuan per dollar.

• The British pound was little changed at 1.3345 to the dollar

Cryptocurrency

• Bitcoin rose 0.2% to $63,424.51.

• Ether fell 0.8% to $2,640.95.

Bonds

• The yield on the 10-year Treasury note rose 2 basis points to 3.77%.

• German 10-year bund yields rose 1 basis point to 2.17%.

• UK 10-year government bond yields rose 3 basis points to 3.96%.

merchandise

• Brent crude rose 1.2% to $74.78 a barrel.

• Spot gold fell 0.1% to $2,625 an ounce.

This story was produced with assistance from Bloomberg Automation.

–With assistance from Mark Cudmore and Winnie Hsu.

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