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STOXX HITS FRESH ALL-TIME HIGH (0851 GMT)
European stocks are well in the black, hitting new all-time
highs, as investors shrug off worries about central banks
reducing their monetary stimulus.
According to JP Morgan analysts, equities are set “to
continue climbing the ‘wall of worry, it remains premature to
position for the central banks' policy mistake.”
The STOXX 600 index is up 0.8%.
A jump in bond yields seems to be easing today, ahead of
some major central banks meetings this week, with the Fed
expected to announce its tapering plans.
Shares in Ryanair are up 1% after an early fall as
the company reports the first quarterly profit for 2019, but it
confirmed a loss forecast for the entire year.
Barclays stocks are down 1.2% after the bank said
that chief executive Jes Staley is to stand down following
British regulators' investigations into his ties with convicted
sex offender Jeffrey Epstein.
(Stefano Rebaudo)
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A WEEK OF CENTRAL BANKS (0714 GMT)
It's hard to believe that just a month or so back the first
Fed rate hike was not expected until Jan 2023. Goldman Sachs is
among those to now predict a hike next July, bringing forecasts
forward a whole year after the U.S. core PCE index -- the Fed's
preferred inflation measure - came in at 4.4% annualised.
A euro zone rate rise in July? Highly unlikely, even if
headline inflation is at 4.1%, nonetheless it's fully priced.
All of which makes it an scintillating week for central bank
watchers, with the Fed likely announcing a taper, the Bank of
England an interest rate rise, Norway signalling its second rate
hike of the year. The most interesting might be the Reserve Bank
of Australia which could revise its guidance after last week
letting its 3-year bond yield bust past the targeted 0.1%.
Bond markets are calmer this morning -- the Aussie yield is
down more than 22 bps, after rising 90 bps last week.
Stock markets got off to a good start, with Japan's Nikkei
rising 2.3% after an unexpectedly comfortable election victory
for Prime minister Fumio Kishida. European shares
are opening higher and Wall Street futures are pointing north.
Company results are cheerful too, with analysts upping
earnings expectations - among others, Ryanair reported its first
quarterly profit since before COVID-19 and jewellery firm
Pandora lifted sales and profit margin outlook for the year.
There is no shortage of growth headwinds though. After last
week's below-forecast U.S. Q3 GDP, another reminder from China
on Monday, with factory activity shrinking for the second month,
while German retail sales dropped 0.9% year/year versus
forecasts of a 1.8% rise.
Finally an interesting nugget from BofA which points out
that mentions of supply chain issues during Q3 earnings calls
were up 412% year-on-year.
Key developments that should provide more direction to markets
on Monday:
-Biden to tout 'largest investment' in climate in Glasgow
-Asian factories shake off lockdown blues, now face supply
headaches
- China knocked oil prices lower with forecast it would release
gasoline and diesel reserves
- Britain warned France on Monday to back down in a fish row
-International Energy Forum conference starts – 2 days
(Sujata Rao)
EUROPE IN THE BLACK (0732 GMT)
European equities are set to open higher as the bond market
seems to stabilize, while U.S. stocks continued to show a
bullish trend.
With much of Europe on holiday today and ahead of central
bank policy meetings in the U.S., UK, and Australia this week,
risk sentiment is under check.
Weak Chinese economic data weighed on Asian markets while
Japanese stocks surged after the outcome of the elections
triggered expectations of more fiscal stimulus.
In late trade on Friday, Wall Street shook off early
declines to close higher despite the drop of Apple and Amazon
shares after results.
(Stefano Rebaudo)
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