European stocks climbed, bolstered by signs China’s stimulus measures are seeping through into the economy, and wagers that global interest rates are approaching a peak.
The Stoxx 600 gauge rose 0.4%, paring some earlier gains. Sectors leading the advance included mining as as rallying metals prices lifted shares including Rio Tinto Plc, Glencore Plc and Anglo American Plc. A gauge of consumer goods stocks, deriving a chunk of its sales from China, also climbed.
Energy shares were steady, as oil prices eased after earlier hitting their highest levels since November on expectations of supply cuts from the OPEC+ producers group.
Among individual movers, Danish drugmaker Novo Nordisk A/S rose to a new record high, having just become Europe’s most valuable firm. Carmaker Mercedes Benz Group AG added more than 1% after unveiling a new, longer-range electric vehicle.
US markets will be shut Monday for the Labor Day holiday, but futures advanced after the S&P 500 Index posted its best week since June.
Market sentiment got a boost from Friday’s US jobs report that showed a steadily cooling labor market, offering the Federal Reserve room to pause rate increases this month. Markets built on those gains after news of a weekend surge in home sales in two of China’s biggest cities, an early sign that government efforts to cushion a record housing slowdown is helping.
Shanghai and Beijing are seen benefiting the most from authorities’ announcement on Thursday that lowered down-payment thresholds across the nation. The Hang Seng index jumped more than 3% Monday before paring gains, while a Bloomberg gauge of Chinese developers jumped as much as 8.7%.
“We have been looking for more significant property rescue measures for some time to shore up sentiment and consumer confidence,” UBS Global Wealth Management Chief Investment Officer Mark Haefele said. “This now appears to be materializing in a more convincing way.”
Oil prices steadied, with WTI crude flat around $85. per barrel, after climbing last week on Russia’s announcement that it will extend export curbs. Saudi Arabia — which along with Moscow sets the tone at the OPEC+ alliance — is widely expected by traders to follow suit by pushing its voluntary curbs into October.
Bond yields inched higher in the euro zone, with rate-setters seemingly divided on whether policy needs to be tightened further this month, given above-forecast inflation and sluggish growth. In the US, many bond investors see the Fed’s 18-month tightening cycle as finally ending, bets that were reinforced after last week’s jobs data.
“The incoming data supports our view of a ‘softish’ landing for the US economy,” Haefele of UBS said.
At the same time, this year’s US stock market rally is strong enough to withstand another leg higher for bond yields, according to the latest Markets Live Pulse survey.
Central banks in Australia and Canada are expected to keep interest rates unchanged this week.
Key events this week:
- Labor Day holiday in US and Canada, Monday
- ECB President Christine Lagarde makes speech at seminar organized by the European Economics & Financial Center, Monday
- Australia current account, rate decision, Tuesday
- Japan household spending, Tuesday
- China Caixin services PMI, Tuesday
- Eurozone S&P Global Eurozone Services PMI, PPI, Tuesday
- US factory orders, Tuesday
- ECB President Christine Lagarde chairs panel focused on central banks and international sanctions at ECB Legal Conference, Tuesday
- Australia GDP, Wednesday
- Eurozone retail sales, Wednesday
- Germany factory orders, Wednesday
- US trade, Wednesday
- Canada rate decision, Wednesday
- Bank of England Governor Andrew Bailey testifies to the UK parliament’s Treasury Select Committee, Wednesday
- Federal Reserve issues Beige Book economic survey, Wednesday
- Boston Fed President Susan Collins speaks on the economy at New England Council, Wednesday
- China trade, forex reserves, Thursday
- Eurozone GDP, Thursday
- US initial jobless claims, Thursday
- Bank of Canada Governor Tiff Macklem to speak on the Economic Progress Report, Thursday
- New York Fed President John Williams participates in moderated discussion at the Bloomberg Market Forum, Thursday
- Atlanta Fed President Raphael Bostic speaks on economic outlook at Broward College, Thursday
- Japan GDP, Friday
- France industrial production, Friday
- Germany CPI, Friday
Some of the main moves in markets:
- The Stoxx Europe 600 rose 0.4% as of 1:27 p.m. London time
- S&P 500 futures rose 0.2%
- Nasdaq 100 futures rose 0.3%
- Futures on the Dow Jones Industrial Average rose 0.2%
- The MSCI Asia Pacific Index rose 1.1%
- The MSCI Emerging Markets Index rose 1.1%
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.2% to $1.0799
- The Japanese yen fell 0.1% to 146.41 per dollar
- The offshore yuan was little changed at 7.2717 per dollar
- The British pound rose 0.3% to $1.2624
- Bitcoin fell 0.7% to $25,860.94
- Ether fell 0.7% to $1,631.36
- The yield on 10-year Treasuries was little changed at 4.18%
- Germany’s 10-year yield advanced two basis points to 2.57%
- Britain’s 10-year yield advanced one basis point to 4.44%
- Brent crude was little changed
- Spot gold was little changed