Stocks’ Rally Pauses Ahead of PCE Data; Yen Tabs: Markets Wrap Ask NetWorth

(Bloomberg) — Stocks were mixed at the end of the week, with U.S. and European benchmarks recording gains amid hopes for central bank easing and Chinese stimulus. Yen gains following Japanese election results.

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Europe’s Stoxx 600 index rose, on track for its best weekly performance since mid-August as pledges of economic support from China’s leaders boosted luxury and mining stocks. U.S. futures edged lower after the S&P 500 hit its 42nd closing record high this year. The dollar and 10-year US Treasury yields traded flat.

Daily announcements from China and a growing race for more interest-rate cuts from the Federal Reserve and the European Central Bank have fueled risk appetite across markets. Traders will look to the central bank’s preferred inflation gauge and a snapshot of consumer demand, which could provide more clues about rates after Thursday’s strongly revised data.

Japan’s yen rose 1% against the dollar after Shigeru Ishiba won a poll for the leadership of the country’s ruling party. Ishiba, a party veteran who has served in several senior roles including defense minister, is seen as supportive of the Bank of Japan’s plan to gradually raise interest rates.

European bond yields and the euro fell as inflation figures came in lower than expected in both Spain and France. This has fueled expectations of more decisive rate cuts by the ECB.

“We still see upside in the European and US markets over the next twelve months,” Natalia Lipikina, head of EMEA equity strategy at JP Morgan Private Bank, told Bloomberg TV. “Central banks are tapering, but at the same time fundamentals are very strong.”

Trade Disadvantages

In China, the CSI 300 index rallied 4.5%, ending its best week since 2008. The People’s Bank of China has unleashed one of the country’s boldest policy campaigns in decades, with Beijing unveiling a robust stimulus package. A sluggish economy and investor confidence.

Stock turnover reached 710 billion yuan ($101 billion) in the first hour of trading on Friday, according to reports from brokerage firms seen by Bloomberg News, which saw the Shanghai Stock Exchange hit by glitches and delays in processing orders. Copper returned above $10,000 a tonne and iron ore broke $100 a tonne.

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By holding the Politburo meeting in September instead of December, Chinese leaders “sent a signal that authorities are still willing to take urgent action to meet the 5% growth target,” senior analysts including Robert Cornell at ING Groep NV said in a note. “We saw a more aggressive than expected policy package from the PBOC this week, and it’s reasonable to expect other policies to follow soon.”

Elsewhere in commodities, oil was steady after two days of sharp declines, with prices set for a substantial weekly decline due to the prospect of more supply from OPEC members Saudi Arabia and Libya.

Gold headed for a third straight week of gains after hitting a series of record highs on hopes that the Fed will maintain the aggressive pace of interest rate cuts this year.

Highlights of this week:

• Eurozone consumer confidence, Friday

• US PCE, University of Michigan Consumer Sentiment, Friday

Some key movements in the markets:

Shares

• The Stoxx Europe 600 was up 0.3% as of 9:38 a.m. London time.

• S&P 500 futures were little changed

• Nasdaq 100 futures fell 0.2%

• The future of the Dow Jones Industrial Average was little changed

• The MSCI Asia Pacific index rose 1.5%

• The MSCI emerging market index rose 1%

Coins

• The Bloomberg Dollar Spot Index was little changed

• The euro fell 0.3% to $1.1139

• The Japanese yen rose 1.1% to 143.28 per dollar

• The offshore yuan fell 0.3% to 6.9914 per dollar

• The British pound fell 0.3% to $1.3374

Cryptocurrencies

• Bitcoin rose 1.5% to $65,659.38

• Ether rose 1.4% to $2,668.47

Bonds

• The yield on 10-year Treasuries fell two basis points to 3.78%.

• Germany’s 10-year yield fell five basis points to 2.13%

• Britain’s 10-year yield fell two basis points to 3.99%.

materials

• Brent crude was up 0.6% at $72.05 a barrel

• Spot gold was down 0.3% at $2,663.27 an ounce

This story was produced with the help of Bloomberg Automation.

–With help from Winnie Hsu.

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