European Stocks Gain as Focus Turns to Inflation: Markets Wrap

(Bloomberg) — European stocks rose at the start of a week featuring key readings on inflation in the US and the UK that investors will study for clues on the outlook for interest rates.

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The Stoxx 600 index climbed 0.5%, with sentiment buoyed by Friday’s gains on Wall Street. Health stocks were among the strongest performers, with Novo Nordisk A/S rallying after a study backed the use of Wegovy, its blockbuster weight-loss drug, to cut heart attacks and deaths in obesity patients with a history of heart disease.

Contracts for the S&P 500 and the Nasdaq 100 slipped following the tech-led rally at the end of last week. An Asian stock gauge edged up 0.3%, supported by gains in Hong Kong.

US consumer price data Tuesday is expected to show inflation easing to a year-on-year rate of 3.3% in October, down from 3.7% in the prior month. The inflation reading will provide fresh clues about the Federal Reserve’s policy path. UK numbers are due Wednesday.

“There are a lot of debates about exactly when is long enough to hold and what data needs to turn to get the Fed more comfortable about cutting” interest rates, said Stephen Chang, a portfolio manager at Pacific Investment Management. “When you look at the curve in terms of expectation for the cut, it starts around somewhere June and July next year and three cuts priced in. We are not far from that in our internal assessment.”

The yen fell to a fresh 2023 low against the dollar Monday, raising concerns that authorities will intervene to support the currency. Oil extended three weeks of declines on demand worries. Treasuries rebounded slightly after a Friday selloff weighed on the short end of the curve.

Meantime, more signs of thawing US-China ties are emerging ahead of Wednesday’s summit between meeting between Joe Biden and Xi Jinping later this week, with Beijing said to be weighing ending a freeze on Boeing Co.’s aircraft.

“All of these things are starting to line up showing that the two sides do have intent to make this look like a better outcome,” said Helen Zhu, chief investment officer at Nan Fung Trinity HK Ltd., commenting on US-China relations in an interview with Bloomberg TV. “We are not expecting a love fest or any kind of fantastic outcome or permanent solution but there could be a graceful period of time going into the US election next year.”

In Japan, producer prices declined in October from the prior month while India will release its latest inflation report Monday. Elsewhere, China’s consumption rebound slowed and private business confidence lost momentum in October, according to independent surveys and alternative data that suggested the economic recovery remains bumpy.

Gold was steady while Bitcoin hovered near $37,000 — around the highest price in 18 months.

Events coming up this week:

  • ECB Vice President Luis de Guindos speaks, Monday

  • US CPI, Tuesday

  • UK jobless claims, Tuesday

  • Chicago Fed President Austan Goolsbee speaks, Tuesday

  • China retail sales, Wednesday

  • UK CPI, Wednesday

  • US retail sales, PPI, Wednesday

  • China new home prices, Thursday

  • US initial jobless claims, Thursday

  • New York Fed President John Williams, Thursday

  • US housing starts, Friday

  • ECB President Christine Lagarde speaks, Friday

  • Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins, San Francisco Fed President Mary Daly all speak, Friday

Some of the main moves in markets:


  • The Stoxx Europe 600 rose 0.5% as of 8:13 a.m. London time

  • S&P 500 futures fell 0.3%

  • Nasdaq 100 futures fell 0.4%

  • Futures on the Dow Jones Industrial Average fell 0.2%

  • The MSCI Asia Pacific Index rose 0.3%

  • The MSCI Emerging Markets Index rose 0.6%


  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0692

  • The Japanese yen fell 0.2% to 151.79 per dollar

  • The offshore yuan was little changed at 7.3019 per dollar

  • The British pound was little changed at $1.2236


  • Bitcoin fell 0.6% to $36,972.72

  • Ether fell 0.3% to $2,054.17


  • The yield on 10-year Treasuries was little changed at 4.65%

  • Germany’s 10-year yield was little changed at 2.73%

  • Britain’s 10-year yield was little changed at 4.34%


  • Brent crude fell 0.9% to $80.69 a barrel

  • Spot gold fell 0.1% to $1,937.81 an ounce

This story was produced with the assistance of Bloomberg Automation.

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