Stocks and Dollar Rise Before Data, Powell Speech: Markets Wrap

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(Bloomberg) — Stocks edged higher Thursday, lifted by a bullish outlook from chip equipment maker ASML Holding NV and expectations that interest rates will fall again in December.  

The Stoxx 600 index climbed 0.6%, after ASML reaffirmed a strong 2030 outlook, boosting its shares by more than 5%. Siemens AG was another gainer, seeing shares hit record highs as grid technology demand helped it increase targets. US futures were about 0.1% higher, and the dollar index extended its rally into a fifth day to hold near two-year highs. 

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With Thursday’s data showing the euro-area economy expanded 0.9% on an annual basis — in line with forecasts — markets are banking on a rate cut next month from the European Central Bank. In the US too, yesterday’s inflation print has kept alive hopes of a potential Federal Reserve cut in mid-December.

Investors are trying to balance a picture of easing inflation and falling rates against the possibility that President-elect Donald Trump will implement hardline pledges on taxes and tariffs, reigniting price growth next year. Confirmation of a Republican election clean sweep suggests more policy leeway for Trump and limits potential curbs on his power.

Amelie Derambure, senior multi-asset portfolio manager at Amundi, said markets were focused for now on the positive effects of a Trump presidency. 

“There is expectation that Trump’s policies will be market friendly, growth friendly, will be impacting higher inflation but not massively, deregulation is going to be good for some sectors,” she said. “The assumption is we have good, soft Trump with no big negative impact priced by markets.”

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Meanwhile, the likelihood of so-called America-First policies has boosted the dollar more than 2% so far this month. Its gains are weighing on a raft of assets, sending gold prices near two-month lows and pushing the yen to the weakest since July, close to levels when Japanese authorities last intervened to prop up the currency. 

The euro dropped as much as 0.5% to touch the lowest in more than a year, while MSCI’s index for emerging market currencies fell for a fifth day. 

Traders are now awaiting US producer price data which is expected to show headline and core producer prices rose year-over-year in October. Fed chief Jerome Powell is also due to speak later in the day. 

Key events this week:

• Eurozone GDP, Thursday
• US PPI, jobless claims, Thursday
• Fed speakers include Jerome Powell, John Williams and Adriana Kugler, Thursday
• China retail sales, industrial production, Friday
• US retail sales, Empire manufacturing, industrial production, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.6% as of 11 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 fell 0.8%
• The MSCI Emerging Markets Index fell 0.9%

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Currencies

• The Bloomberg Dollar Spot Index rose 0.3%
• The euro fell 0.5% to $1.0512
• The Japanese yen fell 0.4% to 156.04 per dollar
• The offshore yuan fell 0.2% to 7.2592 per dollar
• The British pound fell 0.5% to $1.2642

Cryptocurrencies

• Bitcoin rose 2.9% to $91,203.79
• Ether rose 0.9% to $3,184.33

Bonds

• The yield on 10-year Treasuries was little changed at 4.45%
• Germany’s 10-year yield declined two basis points to 2.37%
• Britain’s 10-year yield was little changed at 4.53%

Commodities

• Brent crude rose 0.4% to $72.56 a barrel
• Spot gold fell 1% to $2,547.55 an ounce

This story was produced with the assistance of Bloomberg Automation.

—With assistance from Chiranjivi Chakraborty and John Viljoen.

(A previous version of this story was corrected to remove reference to Siemens Energy)

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