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Cape Town - Stocks in Europe advanced on positive economic data from the region’s biggest economy. The dollar crept lower, while Treasuries were steady and US equity-index futures gained before a key inflation report.
The Stoxx Europe 600 Index climbed as earnings season continued, following a mixed session in Asia as the yen’s rise to a 15-month high weighed on Japan’s Topix index.
Shares in Hong Kong and Seoul gained, while those in Shanghai fluctuated before a week-long Lunar New Year holiday. Bunds advanced, along with other core European bonds, even as data showed Germany’s economic upswing extended into the fourth quarter.
American consumer-price data due Wednesday may give some clues on where markets are heading, with investors assessing whether the outlook for inflation is strong enough to provoke a steeper trajectory of US interest-rate increases. New chairperson Jerome Powell suggested the Federal Reserve would forge ahead with gradual rate increases even as it keeps an eye on financial-system risks following the recent equity rout.
Elsewhere, WTI crude oil drifted below $59 a barrel after its worst week in two years as fears over rising US supplies curb investor optimism. Gold rose, while South Africa’ rand headed for its strongest level against the dollar in almost three years as the nation waited for President Jacob Zuma to respond to his party’s call for him to resign.
Here are some important things to watch out for this week:
• Eurostat will update its estimate for fourth-quarter growth in the eurozone at 11:00 in Luxembourg. It reported a 0.6% increase in GDP on January 30.
• Lunar new year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia.
• Chinese mainland markets are closed February 15 to February 21.
• The US core consumer-price index probably increased at an annual 1.7% pace in January, economists project.
• Retail sales in the US, also out on Wednesday, probably increased for a fifth straight month.
• Earnings season continues in full swing with reports including companies from Bunge to Nestlé.
These are the main moves in markets:
Stocks
• The Stoxx Europe 600 Index increased 0.9% as of 10:05.
• The UK’s FTSE 100 Index climbed 0.7%.
• Germany’s DAX Index gained 0.9%.
• Futures on the S&P 500 Index rose 0.5%.
• The MSCI Asia Pacific Index rose 0.3%.
• Topix index fell 0.8%, Hong Kong’s Hang Seng Index gained 2.5%, the Kospi rose 1.1% and Australia’s S&P/ASX 200 Index fell 0.3%.
Currencies
• The Bloomberg Dollar Spot Index dipped 0.1% to the lowest in more than a week.
• The euro climbed 0.1% to $1.2361.
• The British pound fell less than 0.05% to $1.3888.
• The Japanese yen gained 0.3% to 107.47 per dollar, the strongest in 15 months.
• The rand jumped 1% to 11.8503 per dollar, the strongest in almost three years.
Bonds
• The yield on 10-year Treasuries fell less than one basis point to 2.83%.
• Germany’s 10-year yield declined two basis points to 0.74%.
• Britain’s 10-year yield dipped one basis point to 1.618%.
• Japan’s 10-year yield decreased one basis point to 0.07%, the lowest in more than five weeks.
Commodities
• West Texas Intermediate crude dipped 0.6% to $58.81 a barrel, the lowest in almost eight weeks.
• Gold rose 0.1% to $1 331.14 an ounce.
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