(Bloomberg) — Global stocks rose as traders geared up for a week laden with political risk and inflation data.
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The Stoxx 600 Index edged up 0.4%, led by auto shares which benefited from news that China and the European Union have agreed to start talks on the bloc’s plan to slap tariffs on electric vehicle imports. However, European markets are likely to stay under pressure ahead of the first voting round of the parliamentary election on Sunday, with polls showing further gains for the far-right National Rally.
S&P 500 equity futures advanced by about 0.2%, while a gauge of dollar strength eased, having enjoyed a five-week rally.
Markets are at a critical juncture heading into the second half of 2024, with an uncertain outlook for central-bank policy rates. The picture is also muddied by a series of upcoming elections — focus this week will be on the first US presidential debate between Joe Biden and challenger Donald Trump. Friday will bring inflation data from the euro area as well as the Federal Reserve’s preferred gauge of consumer costs, the PCE deflator.
“This week is relatively data-light except for the key PCE data which will be a big driver, and the Trump-Biden debate will be a major event,” said Elias Haddad, a strategist at Brown Brothers Harriman.
He said French political risks and robust US growth would continue to give the US an edge, potentially supporting the dollar uptrend.
The outlook hinges to a large extent on whether the Federal Reserve’s favored inflation yardstick shows a softer monthly advance in price growth. Economists expect the month-on-month figure to slow significantly, which could well pave way for officials to begin lowering interest rates by September.
In Paris, Eurofins Scientific SE dropped as much as 24% after Muddy Waters Capital LLC disclosed a short position in the laboratory services firm.
In New York premarket trading, Broadcom Inc. rose as much as 1.4% after Reuters reported the semiconductor device maker is working with ByteDance on developing an advanced AI processor, while Micron Technology Inc rose ahead of its earnings report due Wednesday.
Earlier, the Japanese yen held near 160 per dollar as top currency official Masato Kanda said authorities are ready to intervene to support it 24 hours a day, if needed.
Key events this week:
Bank of Canada Governor Tiff Macklem speaks, Monday
San Francisco Fed President Mary Daly speaks, Monday
Fed Governor Christopher Waller speaks, Monday
Canada CPI, Tuesday
US Conference Board consumer confidence, Tuesday
Fed Governor Lisa Cook, Fed Governor Michelle Bowman speaks, Tuesday
Australia CPI, Wednesday
UK Prime Minister Rishi Sunak and Labour leader Keir Starmer debate, Wednesday
Bank of Finland’s 3rd International Monetary Policy Conference begins, Wednesday
RBA Deputy Governor Andrew Hauser speaks, Thursday
Japan retail sales, Thursday
Philippines rate decision, Thursday
China industrial profits, Thursday
Eurozone economic confidence, consumer confidence, Thursday
BOE releases financial stability report, Thursday
Sweden rate decision, Thursday
Turkey rate decision, Thursday
US durable goods, initial jobless claims, GDP, wholesale inventories, Thursday
Mexico rate decision, Thursday
Japan Tokyo CPI, unemployment, industrial production, Friday
UK GDP, Friday
France, Italy, Spain CPI, Friday
US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday
Richmond Fed President Thomas Barkin speaks, Friday
Colombia rate decision, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.4% as of 9:47 a.m. London time
S&P 500 futures rose 0.2%
Nasdaq 100 futures rose 0.2%
Futures on the Dow Jones Industrial Average rose 0.2%
The MSCI Asia Pacific Index fell 0.2%
The MSCI Emerging Markets Index fell 0.3%
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro rose 0.2% to $1.0717
The Japanese yen was little changed at 159.76 per dollar
The offshore yuan was little changed at 7.2887 per dollar
The British pound rose 0.1% to $1.2662
Cryptocurrencies
Bitcoin fell 1.3% to $62,868.1
Ether fell 1.3% to $3,388.71
Bonds
The yield on 10-year Treasuries declined one basis point to 4.25%
Germany’s 10-year yield was little changed at 2.40%
Britain’s 10-year yield declined two basis points to 4.06%
Commodities
Brent crude rose 0.2% to $85.43 a barrel
Spot gold rose 0.3% to $2,329.95 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Aya Wagatsuma.
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