This content was published on September 12, 2023 – 05:38
(Bloomberg) — European stock futures edged higher as traders awaited jobs data from the UK that will help determine Bank of England’s policy rate path. Key data from Germany is also due.
The Euro Stoxx 50 rose 0.2% pointing to a third day of gains for the regional benchmark. The British pound and the euro were little changed.
There’s now enough evidence that Britain’s labor market is cooling, according to Ana Andrade at Bloomberg Economics. That, however, may not be enough for the BOE’s Monetary Policy Committee to contemplate a pause just yet. “That’s because the threat to the central bank’s 2% inflation target from strong pay growth remains too high,” she wrote in a note.
Germany’s economic recovery is in spotlight as well with the release of the ZEW survey, with sentiment likely weighed down by tighter monetary conditions.
Investors will also keep a close eye on Apple Inc. as it’s set to unveil new iPhone 15 lineup later Tuesday. The tech titan is looking to snap several straight quarters of sluggish sales — its longest slump in two decades — and get consumers excited about upgrading again with new features.
Meanwhile, stocks in Asia fluctuated and Chinese shares were back in the red. Gains triggered by news on Country Garden Holdings Co. — which secured payment extension approval from its bondholders — were not enough to keep the positive sentiment going for long.
US stock futures were marginally lower after tech shares led the way forward Monday, with the Nasdaq 100 rising 1.2%.
In currencies, the yen fell and the greenback steadied after falling by the most in two months. The yuan was little changed after China’s central bank set its daily fixing rate at below 7.20 versus the dollar, another sign that it won’t tolerate excessive yuan weakness.
The Japanese government saw a solid demand during the auction of its five-year bond Tuesday, with a higher-than-expected cut-off price. The sale was the first since central bank Governor Kazuo Ueda jolted markets with comments on the negative interest rate policy. Yield on the five-year note fell to 0.27% from a day’s high of 0.290% after the auction, while that of the 10-year benchmark bond was up slightly to 0.71%.
Stable
In the US, consumers’ inflation expectations were mostly stable in August, but households grew more concerned about their finances and more pessimistic about the job market, according to a Fed Bank of New York survey.
The consumer-price index report Wednesday will provide the latest insight into how much further the Fed may need to go to pull inflation back toward its target. Monthly inflation is expected to accelerate to 0.6% in August, while core is seen stable at 0.2%, according to economists’ estimates.
“If we do see potentially a more sticky inflation number than the 0.6% expected by economists or 0.2% on core, I would expect to see the bond market start to potentially price in another rate hike before the end of the year, potentially as early as November,” Anthony Doyle, head of investment strategy at Firetrail Investments Pty Ltd, said on Bloomberg Television.
Meanwhile, some 26% of respondents in the latest MLIV Pulse survey say they plan to decrease their exposure to the S&P 500 over the next month. That’s double the amount of those who plan to buy. Only 13% of respondents said they might increase exposure.
In commodities, oil edged up, trading near the highest level this year before reports that may offer further insight into the market’s balances. Gold was little changed.
Elsewhere, Bitcoin rose after dropping to the lowest since June on Monday, as the world’s largest digital token formed a so-called death cross pattern — in which the 50-day moving average falls below its 200-day marker. Such a crossover typically signals a loss of short-term momentum and further selling pressure ahead.
Key events this week:
- Germany ZEW survey expectations, Tuesday
- UK jobless claims, unemployment, Tuesday
- Apple set to unveil iPhone 15 line and next-generation smartwatches at “Wonderlust,” its biggest product-upgrade event of the year, Tuesday
- Japan PPI, Wednesday
- Eurozone industrial production, Wednesday
- UK industrial production, Wednesday
- US CPI, Wednesday
- Tech leaders including Tesla’s Elon Musk and Meta Platforms’ Mark Zuckerberg are set to attend a forum on the future of AI convened by Senator Chuck Schumer, Wednesday
- Japan industrial production, Thursday
- European Central Bank policy meeting and news conference by President Christine Lagarde, Thursday
- US retail sales, PPI, business inventories, initial jobless claims, Thursday
- China property prices, retail sales, industrial production, Friday
- US industrial production, University of Michigan consumer sentiment, Empire Manufacturing index, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 6:23 a.m. London time. The S&P 500 rose 0.7%
- Nasdaq 100 futures were little changed. The Nasdaq 100 rose 1.2%
- Japan’s Topix rose 0.5%
- Australia’s S&P/ASX 200 rose 0.1%
- Hong Kong’s Hang Seng fell 0.1%
- The Shanghai Composite fell 0.2%
- Euro Stoxx 50 futures rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0740
- The Japanese yen fell 0.2% to 146.84 per dollar
- The offshore yuan was little changed at 7.3062 per dollar
- The Australian dollar was little changed at $0.6429
- The British pound was little changed at $1.2515
Cryptocurrencies
- Bitcoin rose 2.2% to $25,644.88
- Ether rose 2.4% to $1,578.05
Bonds
- The yield on 10-year Treasuries was little changed at 4.29%
- Japan’s 10-year yield was unchanged at 0.705%
- Australia’s 10-year yield was little changed at 4.15%
Commodities
- West Texas Intermediate crude rose 0.4% to $87.66 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott and Masaki Kondo.
©2023 Bloomberg L.P.
