Monday , May 17 2021

Europe stocks advance as futures drift; dollar drops

Bloomberg

European stocks were steady while US equity futures drifted lower on Monday as investors looked for fresh catalysts to push global shares beyond record highs. The dollar slid.
The Stoxx Europe 600 Index advanced to a fresh record following a seventh straight week of gains. Nasdaq 100 futures got a boost from easing Treasury yields, while S&P 500 contracts were steady after the US gauge chalked an all-time high.
Chinese stocks outperformed amid easing concerns about the health of state enterprise China Huarong Asset Management Co., a distressed-debt manager. China’s financial regulator said that Huarong had ample liquidity, the first official comments since the company missed a deadline to report earnings. Ebbing fears of contagion drove a rally in Huarong bonds.
Robust economic data from China and the US last week helped push the MSCI All-Country World Index to another record despite concerns surrounding the spread of Covid-19 variants. New infections in the past week surpassed 5.2 million, the most since the pandemic began.
The risk of another destabilising increase in borrowing costs has also subsided, as bond yields have pulled back from recent highs. This week traders will look for further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace.
“Our current view is that with short-term interest rates set to remain low for the medium term and our expectation that earnings will continue to increase, it is unlikely that the increase in long-term interest rates will trigger an equity market fall,” Russel Chesler, head of investments and capital markets at VanEck Australia, said in a note.
Elsewhere, Bitcoin pared losses after tumbling the most since February over the
weekend.
Futures on the S&P 500 Index were little changed at 9:14 am London time and the Stoxx Europe 600 Index gained as much as 0.2%.
While the MSCI Asia Pacific Index rises by around 0.2%, the MSCI Emerging Market Index increased 0.1%.
The Bloomberg Dollar Spot Index dipped 0.3% and the euro gained 0.3% to $1.2019.
While the British pound rises 0.3% to $1.3877, the onshore yuan strengthened 0.1% to 6.512 per dollar. The Japanese yen strengthened 0.6% to 108.17 per dollar.
The yield on 10-year Treasuries fell two basis points to 1.56% and the yield on two-year Treasuries dipped less than one basis point to 0.16%.
While Germany’s 10-year yield was unchanged at -0.26%, Britain’s 10-year yield dipped less than one basis point to 0.762% and Japan’s 10-year yield falls one basis point to 0.087%.
West Texas Intermediate crude increased 0.1% to $63.17 a barrel and Brent crude was little changed at $66.74 a barrel. Gold strengthened 0.5% to $1,785.45 an ounce.

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