European stock markets rose and the euro fell after the European Central Bank said it would maintain a moderate monetary stance for as long as necessary.
Speaking at the Finance Committee of the French National Assembly, the member of the governing council, François Villeroy de Galhau said the ECB remains committed to its 2% inflation target and is closely watching the impact of exchange rates.
The stock markets were also supported by M&A news. French grocery store Carrefour SA rose 10% after Alimentation Couche-Tard Inc., a convenience store giant that owns the Circle K chain, said it was exploring a transaction. Telefonica SA also jumped 10% after American Tower Corp. announced that it would buy telecommunications towers in Europe and Latin America from the company.
In US assets, Treasury reference yields fell, the dollar stabilized and equity futures rose. A $ 38 billion Treasury auction was met with strong demand on Tuesday and two Federal Reserve officials declined the possibility of reducing bond purchases soon.
St. Louis Federal Reserve Bank President James Bullard said overcoming the pandemic remains the political priority in comments yesterday, a sentiment echoed by Boston Fed chief Eric Rosengren. This eased concerns among nervous investors that the Fed may be heading for a repeat of the so-called fury crisis in 2013, when the withdrawal of monetary stimulus sparked volatility in financial markets.
“Coordinated comments from Fed governors” are helping to lower bond yields, strategists at Deutsche Bank AG, including Jim Reid, said in a note to customers. “We only had seven business days this year and we have already had a 360-degree reduction debate held by the Fed.”
In Japan, the Nikkei 225 surpassed on Wednesday, reaching a record high in dollars. Shares also rose in South Korea, while Hong Kong shares were flat.
New York oil futures rose for the seventh session, rising to $ 54 a barrel in the biggest earnings run since February 2019. The combination of an industry report pointing to another drop in U.S. oil stocks, cuts in production Saudi Arabia and a weaker dollar are all driving the rise in energy prices.
Here are some important events to come:
- JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co., as well as companies ranging from Taiwan Semiconductor Manufacturing Co. for Infosys Ltd., are among those who must report earnings.
- The EIA’s crude oil inventory report is due on Wednesday.
- Christine Lagarde, of the European Central Bank, speaks in an online conference Wednesday.
- US consumer price inflation figures are released on Wednesday.
- US President-elect Joe Biden plans to chart fiscal support proposals on Thursday.
- Federal Reserve President Jerome Powell participates in a webinar on Thursday.
- Initial data on claims for unemployment benefits in the U.S. are due on Thursday.
- US retail sales, industrial production, commercial inventories and consumer sentiment numbers are due Friday.
These are some of the main movements in the markets:
Stocks
- Futures on the S&P 500 index gained 0.2% as of 9:53 am, London time.
- The Stoxx Europe 600 Index has hardly changed.
- The MSCI Asia Pacific index increased by 0.5%.
- The MSCI Emerging Market Index was up 0.5%.
Coins
- The Bloomberg Dollar Spot Index gained 0.1% to 1,121.36.
- The euro fell 0.1% to $ 1.2187.
- The British pound was up 0.1% to $ 1.3696.
- The Japanese yen has barely changed at 103.84 per dollar.
Titles
- Yield on 10-year Treasury bills fell by a basis point to 1.12%.
- Yield on two-year Treasury bills increased less than a basis point to 0.15%.
- Germany’s 10-year yield fell three basis points to -0.49%.
- Britain’s 10-year yield decreased four basis points to 0.331%.
Commodities
- West Texas Intermediate crude gained 0.4% to $ 53.37 a barrel.
- Gold appreciated 0.1% to $ 1,856.21 an ounce.
– With the help of Steve Matthews and Vivien Lou Chen