Europe Futures Fall on China Meet Readout, Fed Bet: Markets Wrap

(Bloomberg) — European stock futures fell, mirroring Asian shares, as a Chinese economic conference readout disappointed traders and risk appetite weakened ahead of next week’s Federal Reserve meeting. 

Euro Stoxx 50 contracts declined 0.2%, with a gauge of world stocks heading for the worst week in nearly a month. Contracts for the S&P 500 index edged up Friday, following selling Thursday on Wall Street prompted by US jobless claims and producer price data.

In Asia, shares in China and Hong Kong led the region’s declines after China’s Central Economic Work Conference ended without policy details on fiscal stimulus even as authorities pledged to boost consumption. But their vow to cut policy rates as well as banks’ reserve ratios sent the Chinese 10-year government bonds to slide below 1.8% for the first time in history. 

“The market may have some hope that the CEWC would give more details on consumption stimulus and property inventory clearance packages, but the turnout was a bit disappointed,” said Jason Chan, senior investment strategist of Bank of East Asia. “Investors may need to wait for more fiscal policy rollout in the first quarter.”

An index of dollar strength was little changed, holding on to gains from the previous five sessions. The stronger dollar was helped along by higher Treasury yields. 

In Japan, confidence among large firms remained upbeat, broadly in line with the Bank of Japan’s view ahead of a policy meeting next week that’s dividing analyst opinions over whether a rate hike is coming.

South Korea’s equity benchmark climbed, briefly recovering from all the losses triggered by President Yoon Suk Yeol’s failed bid to impose martial law. A local newspaper, Munhwa Ilbo, reported that more than eight members from South Korea’s ruling People Power Party support Yoon’s impeachment motion, a minimum vote total required for approval.

Shares of data center operator DigiCo Infrastructure REIT slumped as much as 10% in their A$2 billion ($1.3 billion) debut in Sydney on Friday, with market watchers citing valuation concerns.

In India, government data showed India’s inflation cooled last month, bringing some relief to the newly-appointed central bank chief.  

Rate Cuts

The European Central Bank trimmed borrowing costs by 25 basis points as expected and indicated it may deliver further cuts in its upcoming meetings. The Swiss National Bank delivered a 50 basis point cut, more than anticipated.

US economic data released Thursday offered a muddy outlook on the health of the economy. Weekly jobless claims rose more than expected, while producer price readings were mixed. US wholesale inflation accelerated in November due to a surge in egg prices.

The data did little to shift expectations for a US rate cut next week. Swaps market pricing reflects around a 95% level of confidence the central bank will reduce borrowing costs by 25 basis points at the December meeting.

In commodities, oil headed for a weekly advance as the prospect for tighter US sanctions against Iran and Russia countered persistent concerns around a sizable global glut next year.

Gold rose, paring a drop of 1.4% Thursday. Bitcoin traded around $100,000.

Key events this week:

• Eurozone industrial production, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 0.1% as of 6:32 a.m. London time
• S&P/ASX 200 futures fell 0.5%
• Japan’s Topix fell 1%
• Hong Kong’s Hang Seng fell 1.7%
• The Shanghai Composite fell 1.7%
• Euro Stoxx 50 futures fell 0.2%
• Nasdaq 100 futures rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0460
• The Japanese yen fell 0.2% to 152.86 per dollar
• The offshore yuan fell 0.2% to 7.2869 per dollar
• The Australian dollar fell 0.2% to $0.6355
• The British pound fell 0.1% to $1.2659

Cryptocurrencies

• Bitcoin rose 0.3% to $100,103.42
• Ether rose 1.5% to $3,925.61

Bonds

• The yield on 10-year Treasuries declined one basis point to 4.32%
• Australia’s 10-year yield advanced three basis points to 4.29%

Commodities

• West Texas Intermediate crude was little changed
• Spot gold rose 0.1% to $2,683.65 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu.

©2024 Bloomberg L.P.