European stocks wobble as traders assess rate path: Market wrap

(Bloomberg) — European stocks struggled for traction after a European Central Bank official warned that monetary policy will have to remain tight until 2024, even as policymakers remain on track to cut rates next month.

Bloomberg’s Most Read

The Stoxx Europe 600 index remained little changed at the opening of light trading, with UK and US markets closed for public holidays. US stock futures and the dollar remained stable.

The European Central Bank is on track to start cutting interest rates next month, but will have to keep policy in restrictive territory throughout the year, chief economist Philip Lane told the Financial Times in an interview published on Monday. fair. A rate cut in June has been widely telegraphed, but subsequent steps are less clear. This week’s data may show that overall inflation in the eurozone rose in May.

“European inflation is back,” although the May spike may be temporary, Credit Agricole SA strategists led by Jean-François Paren wrote in a note. “This does not call into question the June cut, but it does increase the risk of devaluation of additional cuts later.”

The MSCI Asia Pacific index posted its biggest gain since May 16, led by stock gauges in Hong Kong, China and Japan.

A range of inflation prints from Australia to Japan, the eurozone and the US will be released this week as traders make delicate bets on the outlook for monetary policy. The Fed’s favorite underlying inflation measure will be released on Friday and is expected to show modest relief. Federal Reserve Chairman Jerome Powell emphasized the need for more evidence that inflation is on track for the 2% target before easing policy.

The ECB’s Lane is expected to speak about inflation in Dublin on Monday. John Williams, Lisa Cook, Neel Kashkari and Lorie Logan are among the US central bankers speaking this week.

Read more: About the ‘T+1’ Rule That Causes US Stocks to Liquidate in One Day: QuickTake

Cash Treasury bond trading has ceased. The “T+1” rule, which has the potential to cause problems for foreign investors, will come into effect when investors return from the long weekend – causing US stocks to be liquidated in one day instead of two.

Meanwhile, gold rose, while iron ore and copper futures fell. Crude oil steadied after its biggest weekly loss in four. This year we have seen a continuous series of spikes in commodity prices, thanks to supply constraints, increased demand and even some speculative activity.

The story continues

Some important events this week:

• ECB’s Philip Lane speaks in Dublin on inflation, Monday

• The IMF holds discussions with Ukrainian authorities to review economic policies as the country seeks to unlock the next tranche of $2.2 billion in aid, Monday

• Cleveland Fed President Loretta Mester speaks at BOJ event in Tokyo; Minneapolis Fed President Neel Kashkari and Governing Council Member Klaas Knot speak at the Barclays-CEPR International Monetary Policy Forum, Tuesday

• South African elections, the most significant since the end of apartheid, Wednesday

• Fed releases Beige Book economic survey, Wednesday

• South African Rate Decision, US Initial Jobless Claims, GDP, Wholesale Inventories, Thursday

• New York Fed President John Williams speaks at the New York Economic Club, Thursday

• GDP data published for Canada, Eurozone, Turkey, Friday

• Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday

Some of the main movements in the markets:

Actions

• The Stoxx Europe 600 was little changed as of 8:24am London time

• S&P 500 futures little changed

• Nasdaq 100 futures little changed

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia-Pacific index rose 1%

• The MSCI Emerging Markets index rose 0.8%

Coins

• The Bloomberg Dollar Spot index was little changed

• The euro was little changed at $1.0851

• The Japanese yen was little changed at 156.87 per dollar

• The offshore yuan was little changed at 7.2567 per dollar

• The British pound was little changed at $1.2746

Cryptocurrencies

• Bitcoin fell 0.4% to $68,440.16

• Ether rose 1.2% to $3,904.36

Titles

• The 10-year Treasury yield fell one basis point to 4.46%

• Germany’s 10-year yield little changed at 2.59%

• Britain’s 10-year yield little changed at 4.26%

goods

• Brent crude rose 0.1% to $82.23 a barrel

• Spot gold rose 0.3% to $2,340.97 an ounce

This story was produced with help from Bloomberg Automation.

–With assistance from Matthew Burgess.

Bloomberg Businessweek Most Read

©2024 Bloomberg LP

Source