European Shares Anticipate Cautious Start as Asian Session Shows Mixed Results
(Bloomberg) — European shares are expected to make a cautious start following a mixed session in Asia where Treasuries fell and oil extended its losses.
According to Bloomberg, the Euro Stoxx 50 futures slid 0.1%, while the Hong Kong and mainland Chinese equities dropped but Japanese stocks rose and Australian stocks also gained.
Treasuries have declined, paring gains from the past month while the 10-year yield rose more than 5 basis points, tracking declines in European bonds. The Bloomberg dollar index steadied after a report that Germany will suspend debt limits, causing concern about more borrowing as the euro-area economy slows.
Additionally, a gauge of developer stocks in China fell 1.9% in mid-afternoon trade, following a previous surge, inspired by reports that China may allow banks to offer unsecured short-term loans to qualified builders for the first time as part of efforts to arrest a housing slump.
Despite the cautious start, global stocks are on track for the best month in three years with the MSCI All Country World Index up 8.6% this month amid growing hopes for peaking US interest rates.
European Central Bank Governing Council member Francois Villeroy de Galhau mentioned that the ECB won’t increase borrowing costs unless there is an unexpected event.
Oil continued its slide on news that OPEC+ will hold its delayed meeting online rather than in-person, casting doubt on the prospect of further production cuts.
Moreover, inflation in Japan accelerated, signaling expectations of policy normalization. Sri Lanka’s central bank also indicated a pause in cutting interest rates as the economy gradually recovers from its unprecedented crisis and inflation bottoms out. There is more data set for release in Asia and the US, including Germany IFO business climate and US S&P Global Manufacturing PMI, later on Friday.
For more information, visit Bloomberg Businessweek.
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