Global stocks and bonds edged ahead on speculation that a crucial U.S. inflation report will show that price pressures eased last month, cementing the view that interest rates have peaked.
Europe’s Stoxx 600 index added 0.2%, with mining shares led by a 4% gain in Glencore Plc after it agreed to buy a majority stake in Teck Resources Ltd’s coal business. for nearly $7 billion. Vodafone Group Plc fell 1.7% after reporting weaker profits in southern Europe.
Stock futures also rose, with contracts on the Nasdaq 100 advancing 0.3%. Treasury yields slipped two basis points to 4.61%. West Texas Intermediate futures climbed.
US inflation likely eased to an annual rate of 3.3% in October from 3.7% in September, according to a Bloomberg survey of economists. However, core inflation, which strips out energy and food costs, is expected to be unchanged, implying slow progress toward the Federal Reserve’s 2% inflation target.
Michael Preiss, portfolio manager at Das Family Office Pte Ltd., expects the numbers to show sticky inflation, but added that “signaling from the Fed is increasingly leading us to believe that we are at the end of the tightening cycle .”
“Our base case is no tariffs and no recession, which may mean a year-end rally in global risk assets, especially stocks,” Preiss said on Bloomberg Television.
Fed Vice Chairman Philip Jefferson and Chicago Fed President Austan Goolsbee will also speak later in the day, and Home Depot Inc. reports income.
Traders are also watching to see how the US inflation data affects the yen. Some analysts said a stronger-than-expected print could push the Japanese currency to a 33-year low and potentially trigger central bank intervention.
Japanese Finance Minister Shunichi Suzuki warned again this week that the government will respond to excessive moves. The currency was trading around 151.7 per dollar, close to falling beyond the 151.95 threshold.
Elsewhere in currency markets, the pound rose 0.2% in response to data showing that UK labor markets are holding up well.
Earlier, MSCI’s Asia Pacific equity index advanced 0.3%. Chinese President Xi Jinping and his American counterpart Joe Biden are due to meet on Wednesday on the sidelines of the Asia-Pacific Economic Cooperation Summit in San Francisco.
KEY EVENTS THIS WEEK
- US CPI, Tuesday
- Home Depot earnings, Tuesday
- Fed Vice President Philip Jefferson, SNB President Thomas Jordan and ECB Chief Economist Philip Lane speak at a conference in Zurich, Tuesday-Wednesday
- Chicago Fed President Austan Goolsbee speaks, Tuesday
- Bank of England Chief Economist Huw Pill speaks at an event on Tuesday
- China retail sales, industrial production, fixed income, Wednesday
- Japan GDP, industrial production, Wednesday
- UK CPI, Wednesday
- US retail sales, business inventories, PPI, Imperial manufacturing, Wednesday
- Target earnings, Wednesday
- China new domestic prices, Thursday
- US initial jobless claims, industrial production, Thursday
- Walmart earnings, Thursday
- US President Joe Biden and Chinese President Xi Jinping were expected to speak at the APEC leaders’ summit on Thursday
- Cleveland Fed President Loretta Mester, New York Fed President John Williams and Fed Vice President for Supervision Michael Barr speak, Thursday
- Bank of England Deputy Governor Dave Ramsden and ECB President Christine Lagarde speak at an event, Thursday
- American housing starts on Friday
- The US Congress faces a midnight deadline to pass a federal spending measure on Friday
- ECB president Christine Lagarde speaks, on Friday
- Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins and San Francisco Fed President Mary Daly speak, Friday
Some of the major movements in markets include:
STOCKS
- The Stoxx Europe 600 rose 0.2% at 10:01 London time
- S&P 500 stocks rose 0.1%
- Nasdaq 100 futures rose 0.2%
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index rose 0.3%
- The MSCI Emerging Markets Index rose 0.2%
CURRENCIES
- The Bloomberg Dollar Spot Index was little changed
- The euro rose 0.2% to $1.0718
- The Japanese yen was little changed at 151.69 per dollar
- The foreign yuan was little changed at 7.2988 per dollar
- The British pound rose 0.2% to $1.2303
CRYPTOCURRENCIES
- Bitcoin was little changed at $36,486.25
- Ether fell 0.7% to $2,046.47
BONDS
- The yield on 10-year Treasuries fell two basis points to 4.62%
- Germany’s 10-year yield fell one basis point to 2.70%
- The UK 10-year yield fell one basis point to 4.30%
GOODS
- Brent crude fell 0.3% to $82.47 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.