European stocks and US futures were little changed as investors weighed the impact of fresh Chinese stimulus and looked ahead to major earnings this week.
Europe’s Stoxx 600 and S&P 500 futures struggled to advance following volatile trading in China, which reflected skepticism among some traders about Beijing’s latest efforts to jumpstart growth. The euro edged lower as investors anticipated an interest rate cut from the European Central Bank on Thursday.
China’s Finance Minister Lan Fo’an vowed more support for the real estate sector at a weekend briefing, but stopped short of producing a headline monetary stimulus figure. Investor attention turns next to results from big US banks, with Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. reporting Tuesday.
“Sentiment is back to being hopeful, but will also get into a seeing-is-believing mode to await actual numbers and more details on consumption and property measures, which were lacking,” said Xin-Yao Ng, an investment director at abrdn Asia Ltd.
In Europe, the ECB will probably advance the global push for monetary easing with an interest-rate cut that policymakers had all but ruled out just a month ago.
Concerns about French finances and German malaise had the euro on the back foot on Monday, while French bond futures were little changed. The region’s biggest economy is suffering a mild recession and output across the whole of 2024 will be flat, according to a Bloomberg survey.
“Clearly, softer activity data and faster disinflation have had an immediate impact on both ECB communication and markets, which are now pricing a 95% probability of a 25-basis point cut this week,” Barclays Plc strategists including Themistoklis Fiotakis wrote in a note to clients. “We view risks to European macro and interest rates as skewed to the downside, which creates scope for further euro weakness, particularly on crosses.”
Cash Treasuries trading is closed Monday for a US holiday.
China’s main CSI 300 Index rose as much as 2.4% after swinging between gains and losses earlier. It capped its worst week since late July on Friday. A Bloomberg Intelligence gauge of Chinese developers rose more than 3%. Investors and analysts surveyed by Bloomberg had expected China to deploy as much as 2 trillion yuan ($283 billion) in fresh fiscal stimulus on Saturday.
“There’s going to be consolidation and pullback,” Wendy Liu, chief Asia and China equity strategist at JPMorgan Chase & Co., told Bloomberg TV. “Structurally, it looks fine. Short-term, it’s not as satisfying.”
Key events this week:
Some of the main moves in markets:
Stocks
Currencies
Cryptocurrencies
Bonds
Commodities
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