European shares and US futures climbed ahead of critical US inflation data this week that traders will use to assess expectations about the timing of stimulus withdrawal and interest-rate hikes. The dollar edged higher and Treasury yields were little changed.
Contracts on the S&P 500 and Nasdaq 100 advanced after indexes ended last week in red. Energy companies led gains in the Stoxx Europe 600 gauge as crude oil extended a rally to a six-week high. Industrial metals rise as supply disruptions continued, with aluminum reaching $3,000 a ton in London for the first time in 13 years.
“That number will be the main highlight of the week as we approach a second half of September that will be full of politics,” Jim Reid, a credit strategist at Deutsche Bank AG in London, wrote in a note on Monday, referring to Tuesday’s inflation data, along with the upcoming German election and US debt-ceiling deadline.
Chinese technology shares tumbled after a report that officials are seeking to break up Ant Group Co.’s Alipay. The country’s online platforms were also told to protect the rights of workers in the so-called gig economy. MSCI Inc’s Asia-Pacific index retreated for the third time in four sessions.
Global stocks have been buoyed this year by robust earnings reports and a rapid recovery from the pandemic-induced recession. With valuations becoming stretched, sentiment soured over the past weeks, amid concerns that economic growth may stall as the delta variant of the coronavirus disrupts the anticipated return to normalcy, while inflation remains sticky.
Retail and travel stocks were the biggest decliners in Europe on Monday. Data on Tuesday may show consumer prices in the US moderated in August. In the latest tapering comments, Federal Reserve Bank of Philadelphia President Patrick Harker said he’s supportive of moving toward a tapering process “sooner rather than later,” according to a report.
Meanwhile, President Joe Biden’s $3.5 trillion tax-and-spending plan faces challenges. Democrat Senator Joe Manchin has cast doubt on the timeline for pushing Biden’s economic agenda through Congress, and proposed tax rates may be watered down to boost chances of the package being passed.
The Stoxx Europe 600 rises 0.4% and futures on the S&P 500 also rise 0.4%. While futures on the Nasdaq 100 climb 0.4%, futures on the Dow Jones Industrial Average also rise 0.5%. The MSCI Asia Pacific Index rises 1% and the MSCI Emerging Markets Index also surges by 0.7%.
While the Bloomberg Dollar Spot Index rise 0.1%, the euro falls 0.2% to $1.1786 and the Japanese yen falls 0.2% to 110.12 per dollar. The offshore yuan falls 0.1% to 6.4516 per dollar and the British pound drops 0.2% to $1.3810.
The yield on 10-year Treasuries was little changed at 1.33% and Germany’s 10-year yield was little changed at -0.33%. Britain’s 10-year yield was little changed at 0.75%.
While Brent crude rises 0.9% to $73.55 a barrel, spot gold also climbs 0.2% to $1,790.41 an ounce.