European stocks rise ahead of inflation data, central bank meetings
Send a link to a friend
[June 12, 2023] By
Elizabeth Howcroft
LONDON (Reuters) -European stocks rose in early trading on Monday and
world stocks were just below 13-month highs ahead of key inflation data
and U.S. Federal Reserve and European Central Bank meetings later in the
week.
After lacking direction during Asian trading, market sentiment picked up
in early European trading, as investors waited for U.S. CPI data due on
Tuesday.
At 0845 GMT, the MSCI World Equity index was up 0.2% on the day, holding
just below a recent 13-month high, while MSCI's Europe index was up
0.8%.
Europe's STOXX 600 was up 0.5% and London's FTSE 100 was up 0.3%.
"Inflation is really moving in the right direction in Europe, and
everyone’s hoping that this is going to be confirmed also in the U.S.
tomorrow," said Samy Chaar, chief economist at Lombard Odier, describing
markets as in "wait-and-see mode."
"Obviously if we have a big negative surprise on inflation and inflation
comes in much hotter than expected, that is going to challenge central
banks and the Fed in its 'pause' strategy," he said.
Investors expect the Fed to keep rates steady when its two-day meeting
ends on Wednesday, but surprise rate hikes by the Reserve Bank of
Australia and the Bank of Canada last week raised the possibility that
central banks will prolong their tightening cycles.
![](http://archives.lincolndailynews.com/2023/Jun/12/images/ads/current/hampton_sda_PROMGRAD_2023.png)
Money markets are pricing in a 73.6% chance of the Fed keeping rates
steady, and a 26.4% chance of a 25 basis points rate hike, according to
the CME FedWatch tool.
The U.S. dollar index was down 0.2% on the day, at 103.310.
The euro was up 0.2% at $1.0775. The European Central Bank is expected
to raise rates by 25 basis points on Thursday.
[to top of second column] |
![](../images/061223PIX/busine63.jpg)
A passerby walks past an electric
monitor displaying various countries' stock price index outside a
bank in Tokyo, Japan, March 22, 2023. REUTERS/Issei Kato
![](http://archives.lincolndailynews.com/2023/Jun/12/images/ads/current/debbiesfloral_lda_060123.png)
Euro zone government bond yields struggled for direction, hovering
near their recent high. The benchmark 10-year German yield was up by
less than one basis point, at 2.385%.
Germany's two-year government bond yield, which is sensitive to
interest rate expectations, was little changed at 2.974% .
The Bank of Japan is due to deliver its rate decision on Friday and
is expected to maintain its ultra-loose policy. Japan's wholesale
inflation slowed for the fifth month in a row in May, data showed.
China's weak post-COVID economic recovery continued to weigh on
sentiment, and Chinese and Hong Kong stocks fell.
Investors are focusing on the rate at which the People's Bank of
China (PBOC) will roll over a batch of 200 billion yuan ($28.00
billion) worth of medium-term policy loans, which are due to mature
on Thursday.
A cut, which is possible given China's post-pandemic recovery has
begun to sputter, would increase the gap between U.S. and Chinese
rates and could weigh on the yuan.
Oil prices fell, as concerns about lower fuel demand from China and
rising Russian crude supply weighed on the market.
Brent crude futures fell 2.2%, to $73.16 a barrel and U.S. West
Texas Intermediate (WTI) crude was at $68.41, down 2.5%.
(Reporting by Elizabeth Howcroft; Editing by Sharon Singleton)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |