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The dollar strengthened, as European stocks and US equity futures fluctuated, with investors focusing on comments from the Federal Reserve and European Central Bank on the outlook for monetary stimulus.
In Europe, the member of the board of directors François Villeroy de Galhau said the ECB would keep an easy position for as long as needed, and US investors were comforted by the remarks of two Federal Reserve officials who pushed back on the possibility of cutting bond purchases anytime soon.
Federal Reserve Bank of St. Louis chairman James Bullard said overcoming the pandemic remained the political priority, a sentiment that was echoed by Boston Fed chief Eric Rosengren. This allayed fears that the Fed was heading for a repeat of the so-called taper tantrum in 2013, when the withdrawal of the monetary stimulus triggered volatility in financial markets.
“Coordinated comments from Fed governors” are helping to deflate bond yields, Deutsche Bank AG strategists, including Jim Reid, said in a note to clients. “We’ve only had seven working days this year and we’ve already had a full 360-degree debate on the Fed’s emissions reduction.”
The Stoxx 600 in Europe remained stable as losses in banks and travel outpaced M&A announcements.
Among the winners of the day, French grocer Carrefour SA rallied 10% after Alimentation Couche-Tard Inc., the supermarket giant that owns the Circle K chain, announced that it was exploring a transaction. Telefonica SA also jumped 10% after American Tower Corp. announced that it would purchase telecommunications towers in Europe and Latin America from the company.
General Motors Co. added 3.6% to pre-market operations in the United States. On Tuesday, GM announced plans to jump into electric vehicles by creating a fully-fledged company called BrightDrop that will supply battery-powered vans and offer fleet management services.
In Japan, the Nikkei 225 index outperformed, hitting a record dollar. Shares rose in South Korea as well, while Hong Kong shares were flat.
New York oil futures rose for a seventh session, surging to $ 54 a barrel in the longest streak of gains since February 2019. all of them are driving energy prices soaring.
Here are some key upcoming events:
- JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co., as well as companies ranging from Taiwan Semiconductor Manufacturing Co. to Infosys Ltd., are among those who must declare income.
- The EIA’s crude oil inventory report is due Wednesday.
- Christine Lagarde from the European Central Bank speaks during a conference Wednesday.
- US consumer price inflation figures are due Wednesday.
- US President-elect Joe Biden plans to present tax support proposals Thursday.
- Federal Reserve Chairman Jerome Powell takes part in a webinar Thursday.
- The first data on jobless claims in the United States is due on Thursday.
- US retail sales, industrial production, business inventories and consumer sentiment figures are expected on Friday.
Here are some of the main movements in the markets:
Stocks
- Futures on the S&P 500 Index were little changed at 10:56 a.m. London time.
- The Stoxx Europe 600 index was little changed.
- The MSCI Asia Pacific index rose 0.5%.
- The MSCI Emerging Market Index climbed 0.5%.
Currencies
- The Bloomberg Dollar Spot Index rose 0.2% to 1,122.20.
- The euro fell 0.2% to $ 1.2179.
- The British pound rose 0.1% to $ 1.3672.
- The Japanese yen weakened 0.2% to 103.94 per dollar.
Obligations
- The yield on 10-year Treasuries fell one basis point to 1.12%.
- The yield on two-year Treasuries rose less than a basis point to 0.15%.
- Germany’s 10-year yield fell three basis points to -0.49%.
- The UK 10-year yield fell two basis points to 0.335%.
Basic products
- West Texas Intermediate crude rose 0.2% to $ 53.36 a barrel.
- Gold strengthened 0.1% to $ 1,855.23 an ounce.
– With the help of Steve Matthews and Vivien Lou Chen
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