European stocks saw gains following a surge in Asian markets after China’s central bank announced a series of stimulus measures to bolster economic growth. The Stoxx Europe 600 Index rose by up to 0.9%, with sectors heavily linked to China such as miners, luxury goods manufacturers, and automakers leading the way. Brent crude surpassed $74 a barrel, iron ore prices rose, and shares of companies like Rio Tinto Plc and BHP Group Ltd. climbed. US equity futures edged higher, while Treasury yields remained stable.
The news of China’s monetary stimulus package on Tuesday, which included reduced reserve requirements for banks and liquidity support for stocks, boosted risk sentiment. This move from Beijing helped alleviate concerns in Europe about slowing economic growth.
“These measures demonstrate that Beijing now recognizes the importance of boosting stock market and housing market sentiment,” said Siguo Chen, portfolio manager at RBC BlueBay Asset Management. “In the short term, it will help the market stabilize, but in the long term, more fiscal support may be necessary.”
China’s stimulus announcement came amid remarks from several Federal Reserve officials suggesting the possibility of further significant rate cuts in the US.
Gold reached a new record of $2,636.16 per ounce during Asian trading hours.
Key events to watch this week include data on US personal spending and the Fed’s preferred price metric, as well as speeches from central bank officials and rate decisions in various countries.
Some notable market movements:
Stocks:
- The Stoxx Europe 600 rose by 0.7%
- S&P 500 futures were relatively unchanged
- Nasdaq 100 futures increased by 0.2%
- MSCI Asia Pacific Index rose by 0.9%
- MSCI Emerging Markets Index rose by 1.4%
Currencies:
- The Bloomberg Dollar Spot Index remained stable
- The euro rose by 0.1% to $1.1125
- The Japanese yen fell by 0.6% to 144.41 per dollar
- The offshore yuan rose by 0.3% to 7.0372 per dollar
- The British pound was unchanged at $1.3345
Cryptocurrencies:
- Bitcoin rose by 0.2% to $63,424.51
- Ether fell by 0.8% to $2,640.95
Bonds:
- The yield on 10-year Treasuries increased by two basis points to 3.77%
- Germany’s 10-year yield rose by one basis point to 2.17%
- Britain’s 10-year yield rose by three basis points to 3.96%
Commodities:
- Brent crude rose by 1.2% to $74.78 a barrel
- Spot gold fell by 0.1% to $2,625 an ounce
This article was created with the help of Bloomberg Automation.
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