(Bloomberg) — European stocks climbed after three days of declines, while US futures fluctuated after the House passed a deal to avert a US default and Federal Reserve officials hinted at a pause in interest-rate hikes.
Most Read from Bloomberg
Miners and media companies led gains in the Stoxx Europe 600 index. Remy Cointreau SA shares jumped after the French distiller’s operating income beat estimates. Adnoc Logistics & Services, the maritime logistics unit of Abu Dhabi’s main energy company, soared as much as 52% on its debut after a hugely oversubscribed initial public offering.
The advance in European stocks echoed a move higher in Asia, where markets got an initial boost from some encouraging economic data out of China.
Passage of the debt-ceiloing deal struck by House Speaker Kevin McCarthy and President Joe Biden means the bill will be sent to the Senate days before the June 5 default deadline. The signs of optimism were helped along by comments from Fed officials who backed the possibility of holding rates unchanged the next meeting.
A European manufacturing gauge came in slightly higher than analysts’ estimates on Thursday, with a busy schedule of data releases still ahead, including euro zone inflation figures. European Central Bank President Christine Lagarde will speak at a conference Thursday. On the policy front, ECB Governing Council member Olli Rehn said the bank won’t contemplate lowering borrowing costs before core consumer-price growth slows in a continuous manner.
S&P 500 futures were flat after a 0.6% loss for the benchmark on Wednesday that left it clinging to a small gain for May, its third monthly advance. Nasdaq 100 futures were also litle changed after the underlying index fell 0.7% Wednesday, weighed by a decline in Nvidia Corp. shares after a rapid rally that has nearly tripled the stock price this year.
Corporate earnings were again in focus. Shares in Salesforce Inc. tumbled around 6% in after-hours trading following a dim outlook for sales while Hewlett Packard Enterprise Co. fell 7.1% Wednesday on slimmer revenue projections than anticipated.
The dollar edged higher, while Treasuries dropped, largely reversing a rally in the previous session.
Hopes for a Fed pause were partly pared back after Wednesday’s JOLTS jobs report for April showed more than 10 million openings, the highest in three months and above consensus estimates.
But Fed Governor Philip Jefferson said the central bank is inclined to keep interest rates steady in June to assess the economic outlook. His remarks were echoed by Philadelphia Fed President Patrick Harker, who said, “I think we can take a bit of a skip for a meeting.”
Attention turns next to US jobless claims data due later Thursday, before Friday’s nonfarm payrolls.
In Asian trading, gains in Chinese stocks faded as investors studied mixed readings on the country’s manufacturing activity. Caixin manufacturing data for May showed an expansion, exceeding forecasts for a small contraction. The numbers followed official figures Wednesday that showed a further contraction in activity.
For the Chinese economy “things are not getting worse outside of the growth momentum — but it’s not getting better,” Wendy Liu, chief Asia and China equity strategist for JPMorgan Chase & Co., said in an interview with Bloomberg Television. However, the economy will be “firmly in recovery in the second half,” she added.
Elsewhere, West Texas Intermediate and Brent crude futures rose after two days of declines.
Key events this week:
-
OB Eurozone Manufacturing PMI, CPI, unemployment, Thursday
-
US construction spending, initial jobless claims, ISM Manufacturing, Thursday
-
ECB President Christine Lagarde speaks at conference, Thursday
-
Fed’s Patrick Harker speaks at webinar, Thursday
-
US unemployment, nonfarm payrolls, Friday
Some of the main moves in markets:
Stocks
-
The Stoxx Europe 600 rose 0.7% as of 9:13 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 0.3%
-
The MSCI Emerging Markets Index was little changed
Currencies
-
The Bloomberg Dollar Spot Index rose 0.1%
-
The euro fell 0.2% to $1.0669
-
The Japanese yen fell 0.4% to 139.86 per dollar
-
The offshore yuan fell 0.2% to 7.1357 per dollar
-
The British pound fell 0.2% to $1.2418
Cryptocurrencies
-
Bitcoin fell 1.1% to $26,818
-
Ether fell 0.6% to $1,855.35
Bonds
-
The yield on 10-year Treasuries advanced four basis points to 3.68%
-
Germany’s 10-year yield advanced two basis points to 2.30%
-
Britain’s 10-year yield was little changed at 4.19%
Commodities
-
Brent crude rose 0.2% to $72.77 a barrel
-
Spot gold fell 0.4% to $1,955.75 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Joanna Ossinger and Richard Henderson.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.