Stocks gain as markets await raft of US and global data

European stocks gained for a second day as traders awaited a raft of economic figures over the next few days for clues on the outlook for global central bank policies.

Miners and real estate led the advance in the Stoxx Europe 600 index after China pledged further measures to support its economy. NN Group NV jumped more than 10% after the financial-services company reported results that beat analysts’ expectations. Futures on the S&P 500 and Nasdaq 100 fluctuated, suggesting US stocks will struggle to build on Monday’s solid gains. Treasury yields dipped, while a gauge of the dollar was steady.

Despite this week’s gains, global stocks are on track for their worst month in almost a year as policy makers remain determined to stifle inflation. Economic reports are assuming even more importance than usual after Federal Reserve Chair Jerome Powell reiterated at Jackson Hole last week that the central bank is ready to raise rates further if the data suggests that is appropriate. 

“August has been a challenging month for markets, with investor sentiment cautiously picking up again,” said Victoria Scholar, head of investment at Interactive Investor. “Focus will be on key economic data from the US this week, with hopes that this will fuel expectations that the economy stateside is heading for a soft landing.”

Traders will be monitoring US consumer confidence data later Tuesday. Other reports this week include US employment growth, the core PCE deflator and August’s payrolls and wages data. Euro-area inflation readings will be in focus this week as well.

Meanwhile, the UK’s stock benchmark outperformed after the slowest increase in grocery bills in almost a year drove down inflation in shops in August, relieving some of the pressure on the Bank of England to keep raising interest rate hikes.

An Asian equity gauge rose 0.8%, supported by gains across major indexes in the region. The Hang Seng Index extended its increase into a second day and China’s stocks outperformed, with the Hang Seng China Enterprises Index rising more than 2%. Chinese officials pledged Monday to strengthen policy support and speed up government spending, according to the official Xinhua News Agency.  

“If policy measures continue to be unveiled in the coming weeks, the market narrative may shift from ‘too little, too late’ to a more confident stance as policymakers regain credibility,” UBS Global Wealth Management strategists including Solita Marcelli and Mark Haefele wrote in a note.

Strategists at Goldman Sachs Group Inc. expect the yen to depreciate to levels last seen more than 30 years ago if the Bank of Japan sticks to its dovish stance. Over the next six months, the currency is projected to reach 155 per dollar — the weakest since June 1990, according to strategists led by Kamakshya Trivedi. They had previously expected the yen to trade to 135. 

In commodities, oil traded around $80 per barrel as traders waited for the next set of clues on the outlook for crude demand in the US and China. Gold edged higher.

Key events this week:

  • US Conference Board consumer confidence, Tuesday
  • Eurozone economic confidence, consumer confidence, Wednesday
  • US GDP, wholesale inventories, pending home sales, Wednesday
  • China manufacturing PMI, non-manufacturing PMI, Thursday
  • Japan industrial production, retail sales, Thursday
  • Eurozone CPI, unemployment, Thursday
  • ECB publishes account of July monetary policy meeting, Thursday
  • US personal spending and income, initial jobless claims, Thursday
  • China Caixin manufacturing PMI, Friday
  • Eurozone S&P Global Eurozone Manufacturing PMI, Friday
  • South African central bank governor Lesetja Kganyago, Atlanta Fed President Raphael Bostic, BOE’s Huw Pill, IMF’s Gita Gopinath on panel at the South African Reserve Bank conference, Friday
  • Boston Fed President Susan Collins speaks at virtual event, Friday
  • US unemployment, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 rose 0.7% as of 9:37 a.m. London time
  • S&P 500 futures were little changed
  • Nasdaq 100 futures were little changed
  • Futures on the Dow Jones Industrial Average were little changed
  • The MSCI Asia Pacific Index rose 0.7%
  • The MSCI Emerging Markets Index rose 0.8%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0810
  • The Japanese yen was little changed at 146.49 per dollar
  • The offshore yuan was little changed at 7.2967 per dollar
  • The British pound was little changed at $1.2611

Cryptocurrencies

  • Bitcoin was little changed at $25,989.44
  • Ether was little changed at $1,647

Bonds

  • The yield on 10-year Treasuries declined one basis point to 4.19%
  • Germany’s 10-year yield declined two basis points to 2.54%
  • Britain’s 10-year yield was little changed at 4.44%

Commodities

  • Brent crude rose 0.3% to $84.64 a barrel
  • Spot gold rose 0.2% to $1,923.13 an ounce

This story was produced with the assistance of Bloomberg Automation.

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