(Bloomberg) — European and U.S. stock futures rose, tracking gains in Asia, after China promised fiscal stimulus and tech shares rose.
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Europe’s Stoxx 600 index rose 1%, while Nasdaq 100 futures rose after Micron Technology Inc.’s upbeat earnings outlook helped boost shares in late trading. Asian stock indexes rose about 2%. U.S. Treasuries and the dollar were steady.
No details were given on the scale of China’s planned fiscal spending, but the announcement stoked broad risk appetite and bolstered the outlook for European industries most exposed to the Chinese economy.Some analysts questioned whether monetary stimulus announced earlier this week would be enough amid worries about deflation and sluggish consumption.
“Will that change the global picture? I’m not sure, but for now it’s a good thing for the world as a whole,” said Kenneth Blue, a strategist at Societe Generale SA. “Individual European stocks are rallying because Chinese consumers are going out and buying luxury goods and things like that.”
As part of a package of measures, China is considering injecting up to 1 trillion yuan ($142 billion) into its largest state-owned banks to give them more capacity to support its struggling economy, Bloomberg reported on Thursday, citing people familiar with the matter. It would be the first time the Chinese government has injected capital into major domestic banks since the 2008 global financial crisis.
Powell speaks
Meanwhile, S&P 500 futures rose 0.7% as traders awaited Federal Reserve Chairman Jerome Powell’s pre-recorded speech at the 10th U.S. Treasury Market Conference.
Federal Reserve Governor Adriana Kugler said on Wednesday she “strongly supports” the U.S. central bank’s interest rate cut last week, adding that further cuts would be appropriate if inflation continues to ease as expected.
Over the weekend, a snapshot of the Fed’s favored price index and consumer demand is expected to back up last week’s aggressive rate cuts and Chairman Powell’s view that the economy remains strong.
In commodity markets, crude oil fell for a second day on reports that Saudi Arabia was considering increasing production and after factions in Libya reached an agreement paving the way for a partial resumption of crude production.
The story continues
Meanwhile, the United States, the European Union and major Middle Eastern powers including Saudi Arabia and Qatar have proposed a three-week ceasefire between Israel and Lebanon’s Hezbollah in an attempt to pave the way for negotiations and avert an all-out war in the region.
Major events this week:
ECB President Christine Lagarde to speak on Thursday
U.S. jobless claims, durable goods and GDP revised Thursday
Federal Reserve Chairman Jerome Powell delivered a pre-recorded speech at the 10th U.S. Treasury Market Conference on Thursday.
China industrial profits, Friday
Eurozone consumer confidence on Friday
US PCE, University of Michigan Consumer Confidence, Friday
Some of the key market developments:
stock
The Stoxx Europe 600 index was up 1.1% as of 8:20 a.m. London time.
S&P 500 futures rose 0.8%
Nasdaq 100 futures up 1.4%
Dow Jones Industrial Average futures up 0.4%
MSCI Asia Pacific Index rises 2.1%
MSCI Emerging Markets Index up 1.8%
currency
The Bloomberg Dollar Spot Index fell 0.2%.
The euro rose 0.2% to $1.1156.
The Japanese yen weakened 0.2% to 144.97 yen to the dollar.
The offshore yuan rose 0.3% to 7.0112 per dollar.
The British pound rose 0.2% to $1.3356.
Cryptocurrency
Bitcoin rose 0.5% to $63,810.38.
Ether rose 1.5% to $2,619.81.
Bonds
The yield on the 10-year Treasury note fell 1 basis point to 3.78%.
German 10-year government bond yields were little changed at 2.17%
UK 10-year government bond yields were little changed at 3.98%
merchandise
Brent crude fell 2.4% to $71.67 a barrel.
Spot gold rose 0.1% to $2,660.44 an ounce.
This story was produced with assistance from Bloomberg Automation.
–With assistance from Winnie Hsu, Divya Patil, and Richard Henderson.
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