Stocks in Europe struggled for traction alongside US index futures as a raft of corporate earnings and economic data presented a somewhat muddy outlook for global growth. Treasuries rose after dropping for three days.
The Stoxx Europe 600 Index erased a modest gain after data showed the euro-area economy remained close to stagnation last month amid a broad downturn in Germany. Global cleaning giant ISS A/S slumped after cutting it full-year outlook and Adidas fell as third-quarter earnings momentum slowed. Banks advanced after Societe Generale strengthened its key capital ratio even as trading revenue disappointed. S&P 500 futures edged lower after a lackluster session in Asia, where benchmarks were up in Japan and Mumbai, but down in Shanghai and Sydney.
Japan’s benchmark bond yield climbed to its highest in more than five months as an auction was met with weaker-than-expected demand amid a global debt sell-off. The yuan traded stronger than 7 per dollar for a second day, while the dollar dipped as investors awaited fresh developments on the US-China trade front. Bloomberg’s gauge of raw-material spot prices climbed to its highest level since April.
A wave of interest-rate cuts by central banks including the Federal Reserve and mounting hopes of a US-China trade deal buoyed confidence in financial markets just as key economic indicators show signs of stabilisation. While the latest data from Europe shows a robust recovery may not be on the cards, the relative improvement eased fears that the global economy was hurtling towards a recession, prompting traders to temper expectations for further monetary easing.
Elsewhere, oil retreated, while gold ticked higher following a slump. Emerging-market stocks declined for the first time in five days.
Earnings are due this week from companies including: Walt Disney, Toyota, Deutsche Telekom. Regional Federal Reserve presidents including Charles Evans, John Williams and Patrick Harker were
expected to speak at events on Wednesday.
A Bank of England monetary decision is due on Thursday. The USDA World Agricultural Supply and Demand Estimates Report for November comes out on Friday.
The Stoxx Europe 600 Index dipped 0.2% in London. Futures on the S&P 500 Index was little changed. The UK’s FTSE 100 Index sank 0.2%. The MSCI All-Country World Index was steady. The MSCI Emerging Market Index declined 0.2%.
The Bloomberg Dollar Spot Index decreased 0.1%. The euro gained 0.1% to $1.109. The British pound was little changed at $1.2879. The Japanese yen strengthened 0.2% to 108.97 per dollar.
The yield on 10-year Treasuries dipped two basis points to 1.84%. The yield on two-year Treasuries declined two basis points to 1.60%. Britain’s 10-year yield decreased one basis point to 0.762%. Germany’s 10-year yield rose less than one basis point to -0.31%. Japan’s 10-year yield jumped four basis points to -0.079%.
West Texas Intermediate crude decreased 0.6% to $56.89 a barrel.