European stocks rose with U.S. futures, tracking gains in Asia, as the panic surrounding a potential global trade war showed signs of easing. Treasury yields and the dollar edged higher, the euro fell and oil climbed.
All but one sector advanced in the Stoxx Europe 600 Index, which jumped following three days of losses. Earlier in Asia, equity markets struggled for direction before climbing. Shares in Japan and China both reversed declines, though the Shanghai Composite Index remained below the 3,000 level it fell through on Tuesday. Oil rose even as Iran signaled OPEC may fail to agree on output limits when it meets at the end of the week. The euro fell after ECB Governing Council member Ewald Nowotny commented on diverging rate paths between the U.S. and Europe. The pound fell before a key Brexit vote.
The threat from U.S. President Donald Trump for tariffs on an additional $200 billion of Chinese goods has dominated the agenda this week, and it was the latest shot in a spat between the two biggest economies that could yet escalate into a full-blown trade war. Assets in emerging markets have been hit especially hard as the tensions coincide with accelerating monetary tightening in the U.S.
Developing-nation stocks rose on Wednesday, paring some of their plunge a day earlier. Turkey’s lira fell again ahead of an election this weekend.
Elsewhere, the onshore yuan rose after the People’s Bank of China set its daily reference rate at a stronger level than all analyst and trader projections. Indonesia’s stocks were the worst performers in Asia as traders returned after a holiday.
Terminal users can read more in Bloomberg’s Markets Live blog.
Here are some key events to watch for this week:
Draghi, Reserve Bank of Australia Governor Philip Lowe, Bank of Japan Governor Haruhiko Kuroda, and Fed Chairman Jerome Powell join a panel on central bank policy in Sintra, Portugal, on Wednesday. Thailand, Philippines and Brazil central bank decisions due Wednesday. Bank of England rate decision on Thursday. Also on Thursday: U.S. jobless claims, New Zealand GDP, South Korea export data. The Organization of Petroleum Exporting Countries meets in Vienna on Friday.
And here are the main market moves:
Stocks
The Stoxx Europe 600 Index climbed 0.6 per cent as of 9:26 a.m. London time. Futures on the S&P 500 Index gained 0.2 per cent. The U.K.’s FTSE 100 Index surged 1 per cent, the largest jump in a month. Germany’s DAX Index increased 0.2 per cent. The MSCI Emerging Market Index climbed 0.6 per cent, the first advance in more than a week and the largest increase in more than two weeks. The MSCI Asia Pacific Index climbed 0.6 per cent, the first advance in more than a week and the biggest increase in more than two weeks.
Currencies
The Bloomberg Dollar Spot Index increased 0.1 per cent to the highest in more than 11 months. The euro decreased 0.2 per cent to $1.1567, the weakest in more than three weeks. The British pound fell 0.1 per cent to $1.3155, the weakest in about seven months. The Japanese yen declined 0.1 per cent to 110.14 per dollar. The Turkish lira sank 0.3 per cent to 4.757 per dollar, the weakest on record.
Bonds
The yield on 10-year Treasuries rose one basis point to 2.90 per cent, the first advance in a week and the biggest advance in more than a week. Germany’s 10-year yield rose one basis point to 0.38 per cent, the first advance in more than a week. Britain’s 10-year yield increased less than one basis point to 1.283 per cent, the first advance in more than a week. Italy’s 10-year yield decreased three basis points to 2.529 per cent, the lowest in almost four weeks.
Commodities
West Texas Intermediate crude gained 0.7 per cent to $65.51 a barrel. Gold dipped 0.2 per cent to $1,272.78 an ounce, the weakest in six months. Brent crude rose 0.7 per cent to $75.59 a barrel.
--With assistance from Adam Haigh , Cecile Vannucci and Andreea Papuc .
Bloomberg