European stocks rose, and US Treasuries remained steady before a speech from Federal Reserve Chair Jerome Powell that could provide insight into the direction of interest rates. The Stoxx 600 index gained 0.4%, while Nasdaq futures slipped. The dollar also edged lower against other major currencies. Crude oil prices declined despite OPEC+ discussing supply cuts, signaling skepticism among traders about their implementation.
Investors are questioning whether strong gains across various assets in November can be sustained. Some are speculating that optimistic market expectations about future interest rate cuts in the US might be premature. Powell’s speech and euro-zone manufacturing data could support the case for the European Central Bank to lower borrowing costs.
Stats in the US suggest a slowdown in the economy, potentially leading to the Fed halting future rate hikes and even cutting rates next year. Recent market activity has trended positively, with the S&P 500 and MSCI All Country World Index seeing significant gains. The Bloomberg Dollar Spot Index experienced its biggest drop in a year, while US Treasury yields fell by around 60 basis points last month.
According to Ryan Detrick, chief market strategist at Carson Group, November saw most traders positioned incorrectly, providing ample opportunity for traders to chase gains in December. Meanwhile, Brent crude traded under $81 a barrel after the OPEC+ meeting announced fresh output cuts without definitive details, and gold was on track for a third weekly gain.
In Asia, the MSCI Asia-Pacific stock index initially fell 0.5%, but Chinese shares later recovered following a report of an unidentified state institution purchasing exchange-traded funds to stabilize markets.
Key events this week include Eurozone S&P Global Manufacturing PMI and US construction spending and ISM Manufacturing data to be released on Friday. Also on Friday, Fed Chair Jerome Powell is scheduled to participate in a “fireside chat” in Atlanta, and Chicago Fed President Austan Goolsbee will deliver a speech.
– Stocks:
– The Stoxx Europe 600: up 0.4%
– S&P 500 futures: unchanged
– Nasdaq 100 futures: fell 0.1%
– Dow Jones Industrial Average futures: unchanged
– Currencies:
– Bloomberg Dollar Spot Index: unchanged
– Euro: rose 0.1% to $1.0899
– Japanese yen: unchanged at 148.21 per dollar
– Offshore yuan: unchanged at 7.1509 per dollar
– British pound: unchanged at $1.2636
– Cryptocurrencies:
– Bitcoin: rose 1.5% to $38,302.78
– Ether: rose 2.5% to $2,096.9
– Bonds:
– Yield on 10-year Treasuries: unchanged at 4.33%
– Germany’s 10-year yield: unchanged at 2.45%
– Britain’s 10-year yield: advanced one basis point to 4.19%
– Commodities:
– Brent crude: fell 0.2% to $80.67 a barrel
– Spot gold: rose 0.2% to $2,040.46 an ounce
This content was produced with the assistance of Bloomberg Automation.
