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(Bloomberg) — European shares pared earlier gains in thin volume trading as some optimism around China’s asset market stimulus eased.
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Europe’s Stocks 600 gauge was trading steady after earlier rising as much as 0.8%. Consumer, travel & leisure and mining shares — sectors with exposure to China — advanced. US markets were closed for the Labor Day holiday and S&P 500 index futures were flat.
With Wall Street closed, European trading volume was about a third below its thirty-day average, according to data compiled by Bloomberg. Danish drugmaker Novo Nordisk A/S has hit a new record high to become Europe’s most valuable company. Carmaker Mercedes-Benz Group AG added more than 1% after unveiling a new, long-range electric vehicle.
Oil futures held near nine-month highs on expectations of crude supply cuts from the OPEC+ group.
Markets were boosted by a U.S. jobs report on Friday that showed continued contraction in the labor market, giving the Federal Reserve room to hold off on rate hikes this month. Sentiment improved further after news that home sales rose over the weekend in China’s two biggest cities, an early sign that government efforts to ease the record housing slump are helping.
Shanghai and Beijing appear to have benefited the most from Thursday’s announcement by authorities, which lowered down-payment limits nationwide. The Hang Seng index jumped more than 3% on Monday before trimming gains, while the Bloomberg gauge of Chinese developers jumped up to 8.7%.
“We have been looking for more substantial asset rescue measures for some time now to strengthen sentiment and consumer confidence,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “It now appears to be materializing in a more concrete way.”
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Last week, WTI crude was up about 0.3% at $85.8 a barrel after Russia announced an extension of export sanctions. Saudi Arabia – which sets the tone for the OPEC+ alliance with Moscow – is widely expected by traders to follow suit by extending its voluntary sanctions into October.
Some investors are confident the Fed will raise rates no further this cycle, with last week’s jobs data bolstering those bets. Plus, the US stock market rally this year is strong enough for bond yields to withstand another phase, according to the latest Markets Live Pulse survey.
“Incoming data supports our view of ‘soft’ conditions for the US economy,” Haefele said.
While Treasury markets were closed, bond yields in the euro zone edged higher, with rate-setters looking divided on whether further policy tightening is needed this month, given above-forecast inflation and sluggish growth. In a speech in London, European Central Bank President Christine Lagarde refrained from indicating whether policymakers would raise or hold interest rates next week.
The central banks of Australia and Canada are expected to keep interest rates unchanged this week.
Major events of the week:
- Labor Day holiday on Monday in US and Canada
- ECB President Christine Lagarde delivers a speech on Monday at a seminar organized by the European Center for Economics and Finance
- Australia Current Account Rate Decision Tuesday
- Japan Household Spending, Tuesday
- China Caixin Services PMI, Tuesday
- Eurozone S&P Global Eurozone Services PMI, PPI, Tuesday
- US factory orders, Tuesday
- ECB President Christine Lagarde chaired a panel focused on central banks and international sanctions at the ECB Legal Conference on Tuesday
- Australia GDP, Wednesday
- Eurozone Retail Sales, Wednesday
- Germany factory orders, Wednesday
- US Business, Wednesday
- Canada Rate Decision, Wednesday
- Bank of England Governor Andrew Bailey testifies before UK Parliament’s Treasury Select Committee on Wednesday
- The Federal Reserve released the Beige Book economic survey on Wednesday.
- Boston Fed President Susan Collins speaks on the economy at the New England Council on Wednesday
- china trade forex reserves thursday
- Eurozone GDP, Thursday
- US Initial Jobless Claims, Thursday
- Bank of Canada Governor Tiff McCallum will speak on Thursday’s Economic Progress Report
- New York Fed President John Williams participates in a moderated discussion at the Bloomberg Markets Forum on Thursday
- Atlanta Fed President Raphael Bostic speaks on the economic outlook at Broward College on Thursday
- Japan GDP, Friday
- France Industrial Production, Friday
- Germany CPI, Friday
Some of the key movements in the markets:
shares
- The Stoxx Europe 600 was little changed at 3:46 PM London time
- S&P 500 futures were little changed
- Nasdaq 100 futures rose 0.2%
- Futures on the Dow Jones Industrial Average fell 0.2%
- MSCI Asia Pacific index rose 1.1%
- MSCI Emerging Markets Index rose 1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0789
- The Japanese yen fell 0.2% to 146.45 per dollar
- The offshore yuan was little changed at 7.2758 per dollar
- The British pound rose 0.3% to $1.2625
cryptocurrency
- Bitcoin fell 0.7% to $25,873.08
- Ether fell 0.7% to $1,630.63
bond
- The yield on 10-year Treasuries was little changed at 4.18%
- Germany’s 10-year yield rose three basis points to 2.58%
- UK 10-year yield rose four basis points to 4.47%
Goods
- Brent crude rose 0.4% to $88.88 a barrel
- Spot gold fell 0.1% to $1,937.97 an ounce
This story was produced with assistance from Bloomberg Automation.
–With assistance from John Cheng and Tassia Sipahutar.
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Source: finance.yahoo.com
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