(Bloomberg) — Stocks advanced with US futures as favorable news reports from China and data from Europe boosted risk appetite. The dollar fell and Treasuries rose.
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The Stoxx Europe 600 Index climbed, with an unexpected slowing of French inflation adding to signs of easing price pressure in the euro area. A rally in Hong Kong shares accelerated on news that China is considering further support for property developers. Contracts on all three major U.S. gauges rose, after the S&P 500 fell Tuesday.
After a volatile year that saw equities tumble with bonds on worries about inflation and higher interest rates, investors are awaiting further clues on the trajectory of monetary policy. Minutes from the Federal Reserve’s last meeting are due later Wednesday, and the keenly watched jobs report later this week.
Treasuries rose further, after Tuesday’s strongest start to a year since 2001.
“If you don’t see a deep recession, you see a shallow recession, all that would be the recipe for markets to see a nice rally starting perhaps in the second half,” said Vasu Menon, executive director, investment strategy for OCBC Bank Wealth Management, in an interview with Bloomberg Television. “There is a lot of liquidity on the sidelines waiting to get back into play, waiting for those macro cues.”
Adding to positive sentiment on China, shares in Hong Kong-listed Alibaba Group Holdings Ltd. jumped after reports that Ant Group Co., in which the e-commerce giant owns a stake, won approval for a $1.5 billion capital raising plan for its consumer unit.
Separate reports that China is mulling an end to a ban on Australian coal sent the Australian dollar surging.
Elsewhere, the yen advanced after the Bank of Japan unveiled further unscheduled bond buying.
The price of oil fell further after the biggest drop in more than a month in the prior session.
Read More: China Vows to Hit Back at Nations Imposing Covid Travel Curbs
The main markets moves are:
Stocks
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The Stoxx Europe 600 rose 0.7% as of 8:20 a.m. London time
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S&P 500 futures rose 0.4%
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Nasdaq 100 futures rose 0.7%
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Futures on the Dow Jones Industrial Average rose 0.2%
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The MSCI Asia Pacific Index rose 0.6%
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The MSCI Emerging Markets Index rose 0.7%
Currencies
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The Bloomberg Dollar Spot Index fell 0.6%
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The euro rose 0.7% to $1.0618
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The Japanese yen rose 0.6% to 130.17 per dollar
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The offshore yuan rose 0.5% to 6.8866 per dollar
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The British pound rose 0.9% to $1.2074
Cryptocurrencies
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Bitcoin rose 1.3% to $16,884.36
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Ether rose 3.5% to $1,253.89
Bonds
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The yield on 10-year Treasuries declined six basis points to 3.68%
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Germany’s 10-year yield declined nine basis points to 2.30%
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Britain’s 10-year yield declined seven basis points to 3.58%
Commodities
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Brent crude fell 1.6% to $80.81 a barrel
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Spot gold rose 1.2% to $1,861.37 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric and Isabelle Lee.
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