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European stocks join global really, euro weakens

Jan 09 2018 11:31
Adam Haigh and Natasha Doff, Bloomberg

European equities joined the upward march in global stock markets as investors bet results from an unfolding earnings season will underpin the rally. The yen strengthened after the Bank of Japan (BOJ) pared bond purchases and the euro weakened.

The Stoxx Europe 600 index rose to its highest level since August 2015 as equity indexes across the continent rallied. The pound fell as UK Prime Minister Theresa May’s attempt to give her government a reboot was marred by a chaotic cabinet reshuffle.

Japanese shares pared gains after the BOJ announcement, underscoring how the rollback of central bank stimulus can affect markets that have reached historic highs around the world. Oil extended its gain above $62 a barrel.

Earnings reports due this week from banks including JPMorgan Chase & Company and Wells Fargo & Company will dominate the market’s focus as traders look for justification of stock prices near record highs. Samsung Electronics dropped in Asian trading after it reported lower-than-expected profit.

China’s yuan dropped as much as 0.4% against the dollar after Bloomberg News reported that the country’s central bank has effectively removed an adjustment mechanism used for the currency’s official daily fixing. That device had been interpreted as a way to limit fluctuations.

Here are some of the other main events to watch for this week:

US inflation data are forecast to show price pressures remain muted, giving hawks little reason to argue for faster tightening. St. Louis Fed bank President James Bullard and head of the New York Fed Bill Dudley are among central bankers scheduled to speak.

China producer and consumer prices data come Wednesday, while a reading on the country’s money supply is expected in coming days. Talks between South Korea and North Korea are set to take place on Tuesday.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index gained 0.3% as of 8:51am London time, with its fifth consecutive advance. The MSCI All-Country World Index advanced less than 0.05%, reaching the highest on record.

The MSCI Emerging Market Index decreased 0.2% to 1 204.29, the first retreat in more than a week. Futures on the S&P 500 Index climbed less than 0.05%.

Currencies

The euro dipped 0.2% to $1.1941, the lowest in more than a week. The Bloomberg Dollar Spot Index advanced 0.2%. The British pound dipped 0.3% to $1.3525.

Bonds

The yield on 10-year Treasuries climbed two basis points to 2.50%, the highest in about 10 months. Germany’s 10-year yield advanced one basis point to 0.44%.

Commodities

Gold sank 0.4% to $1,314.72 an ounce, the biggest dip in four weeks. West Texas Intermediate crude climbed 0.6% to $62.10 a barrel, the highest in more than two years.

Copper gained 0.6% to $3.24 a pound, the biggest climb in more than a week.

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european markets  |  equities  |  markets
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