(Bloomberg) — European stocks fell on weak German data and higher oil prices amid fears of inflation.
Most read from Bloomberg
The Stoxx 600 index retreated 0.6%, with German factory orders sliding for a sixth day after falling in July, a sign that trouble in Europe’s largest economy continued into the third quarter. The euro jumped as much as 0.2% against the dollar after European Central Bank Governing Council member Klaus Knot said markets may be underestimating the chances of an interest rate hike in September.
West Texas Intermediate held near its highest since November and Brent hovered around $90 a barrel – after breaching that level on Tuesday – as the biggest OPEC+ producers extended their supply cuts until the end of the year.
Heng Kun Hao, head of market strategy at United Overseas Bank, said Brent could continue to trade higher amid supply cuts, with prices expected to hover around $90 between now and the end of the year and around $95 in the first half of next year. Ltd. in Singapore.
“A key risk to our higher price forecast is further economic weakness in China that could reduce energy demand,” he wrote in a note. “However, with energy prices rising again, the immediate concern appears to be the persistent threat of global inflation.
The dollar was little changed against its Group-10 peers, but Treasury yields were near their highest on Tuesday as Treasury yields rose against rents on expectations that the Federal Reserve will prompt a longer rate hike. At the beginning of the European trade, productions were slightly lower.
The greenback’s early strength prompted Japan’s top currency official, Masato Kanda, to say on Wednesday that he would not rule out any options if currency moves continue. China’s central bank has moved to defend the yuan by fixing it higher than expected every day since late June. The yen gained, while the offshore yuan held firm.
Asian stocks were trading mixed, with benchmark indexes flat in Hong Kong and mainland China, while Japan rose for an eighth day. Chinese property developers extended their gains, with Sunac China Holdings Ltd up more than 70% before retreating on speculation that more stimulus is coming.
Elsewhere, gold was little changed after falling sharply for more than a month in the previous session.
Key events this week:
-
Eurozone retail sales, Wed
-
German factory orders, Wednesday
-
US Business, ISM Services Index, Wed
-
Canadian Rate Decision, Wed
-
Bank of England Governor Andrew Bailey testified to the UK Parliament’s Treasury Select Committee on Wednesday.
-
The Federal Reserve will release its Beige Book of Economic Research on Wednesday.
-
Susan Collins, president of the Boston Federation, will speak on Wednesday
-
Dallas Federation President Lori Logan Speaks, Wed
-
Chinese business, forex stock, Thursday
-
Eurozone GDP, Thursday
-
US first jobless claims, Thursday
-
Governor of the Bank of Canada, Tiff McCall, will speak in the economic progress report on Thursday
-
Atlanta Federation President Rafael Bostic will speak on Thursday
-
New York Fed President John Williams participated in a discussion at the Bloomberg Markets Forum on Thursday.
-
Japan’s GDP, Fri
-
German CPI, Fri
-
US Wholesalers, Consumer Credit, Fri
Some of the major activities in the markets are-
Shares
-
The Stoxx Europe 600 was down 0.7% at 8:15 a.m. London time.
-
S&P 500 futures fell 0.3%
-
Nasdaq 100 futures were down 0.5%
-
The future of the Dow Jones Industrial Average has changed little
-
The MSCI Asia Pacific index was little changed
-
The MSCI emerging markets index fell by 0.4%
Currencies
-
The Bloomberg Dollar Spot Index was little changed.
-
The euro rose 0.2 percent to $1.0740.
-
The Japanese yen rose 0.2% to 147.37 per dollar.
-
The offshore yuan was little changed at 7.3120 against the dollar.
-
The British pound was little changed at $1.2563.
Crypto currencies
-
Bitcoin rose 0.2% to $25,749.48
-
Ether was little changed at $1,629.05.
Bonds
-
The yield on 10-year Treasuries was little changed at 4.26 percent
-
Germany’s 10-year yield rose four basis points to 2.65%.
-
Britain’s 10-year yield rose two basis points to 4.55%.
Goods
This story was produced with the help of Bloomberg Automation.
– With help from Brett Miller, Jake Lloyd-Smith and Yumi Teso.
Most read from Bloomberg Business Week
©2023 Bloomberg LP
