European Stocks Climb on ECB; Treasury Yields Slip: Markets Wrap

European stocks climbed and the euro edged lower after the European Central Bank said it will keep an easy monetary stance for as long as needed.

Speaking at the Finance Committee of French National Assembly, governing council member Francois Villeroy de Galhausaid the ECB remains committed to its 2% inflation target and is closely watching the impact of foreign exchange rates.

Equity markets were also supported by M&A news. French grocer Carrefour SA rallied 10% after Alimentation Couche-Tard Inc., the convenience-store giant that owns the Circle K chain, said it’s exploring a transaction.Telefonica SA also jumped 10% after American Tower Corp. said it would buy telecommunication towers in Europe and Latin America from the company.

In U.S. assets, benchmark Treasury yields slid, the dollar steadied and equity futures ticked higher. A $38 billion Treasury auction was met with solid demand on Tuesday and two Federal Reserve officials pushed back on the possibility of tapering bond purchases anytime soon.

Federal Reserve Bank of St. Louis President James Bullard said getting through the pandemic remains the policy priority in remarks yesterday, a sentiment that was echoed by Boston Fed chief Eric Rosengren. That eased concern among nervous investors that the Fed might be headed for a repeat of the so-called taper tantrum in 2013, when the withdrawal of monetary stimulus unleashed volatility across financial markets.

“Coordinated comments from Fed governors” are helping to deflate bond yields, said Deutsche Bank AG strategists including Jim Reid in a note to clients. “We’ve only had seven business days this year and we’ve already had a full 360-degree tapering debate played out by the Fed.”

In Japan, the Nikkei 225 outperformed Wednesday, reaching a record in dollar terms. Equities also ticked up in South Korea, while Hong Kong shares were flat.

Oil futures in New York rose for a seventh session, climbing toward $54 a barrel in the longest run of gains since February 2019. The combination of an industry report pointing to another decrease in U.S. crude stockpiles, Saudi Arabia’s output cuts and a weaker dollar are all driving the run up in energy prices.

Here are some key events coming up:

• JPMorgan Chase & Co.,Citigroup Inc. andWells Fargo & Co., as well as firms ranging fromTaiwan Semiconductor Manufacturing Co. toInfosys Ltd., are among those due to report earnings.
• EIA crude oil inventory report is due Wednesday.
• European Central Bank’s Christine Lagarde speaks at an onlineconference Wednesday.
• U.S. consumer-price inflation figures are due Wednesday.
• U.S. President-elect Joe Biden plans to lay outproposals for fiscal support on Thursday.
• Federal Reserve Chairman Jerome Powell takes part in awebinar on Thursday.
• U.S. initial jobless claims data are due Thursday.
• U.S. retail sales, industrial production, business inventories and consumer sentimentfigures are due Friday.

These are some of the main moves in markets:

Stocks

• Futures on the S&P 500 Index gained 0.2% as of 9:53 a.m. London time.
• The Stoxx Europe 600 Index was little changed.
• The MSCI Asia Pacific Index rose 0.5%.
• The MSCI Emerging Market Index climbed 0.5%.

Currencies

• The Bloomberg Dollar Spot Index gained 0.1% to 1,121.36.
• The euro fell 0.1% to $1.2187.
• The British pound climbed 0.1% to $1.3696.
• The Japanese yen was little changed at 103.84 per dollar.

Bonds

• The yield on 10-year Treasuries declined one basis point to 1.12%.
• The yield on two-year Treasuries increased less than one basis point to 0.15%.
• Germany’s 10-year yield fell three basis points to -0.49%.
• Britain’s 10-year yield decreased four basis points to 0.331%.

Commodities

• West Texas Intermediate crude gained 0.4% to $53.37 a barrel.
• Gold strengthened 0.1% to $1,856.21 an ounce.

— With assistance by Steve Matthews, and Vivien Lou Chen

Source: Read Full Article