(Bloomberg) — European shares struggled for traction after a European Central Bank official warned that policy will have to stay restrictive all year even as policy makers remain on course to cut rates next month.
Most Read from Bloomberg
Severe Turbulence Leaves 12 Injured on Qatar Airways Flight
Fed’s Favorite Underlying Inflation Gauge Is Seen Cooling
Musk’s xAI Raises $6 Billion in Bid to Challenge OpenAI
China’s Housing Rescue Has a Poor Track Record in Pilot Cities
Xi’s China EV Dream Came True. 10 Years On, Walls Are Going Up
The Stoxx Europe 600 index was little changed in light trading, with UK and US markets closed for holidays. American equity futures and the dollar were steady.
The European Central Bank is on track to start cutting interest rates next month, but will have to keep policy in restrictive territory through 2024, Chief Economist Philip Lane told the Financial Times in an interview published Monday. A rate cut in June has been widely telegraphed, but subsequent steps are less clear. Data this week may show headline inflation in the euro region ticked up in May.
“European inflation is back,” though the May spike may be temporary, Credit Agricole SA strategists led by Jean-François Paren wrote in a note. “This does not call the June cut into question but adds risk of de-pricing additional cuts later.”
Among individual movers in Europe, Alstom SA rose as much as 6.3% after the French railway-equipment maker launched a rights issue at a subscription price with a 25% discount. Bakkafrost P/F fell as much as 6.1%, the most since April, after the Oslo-listed Faroese salmon farmer said it found the infectious salmon anemia virus some of its pens.
The MSCI Asia Pacific index posted its biggest gain since May 16, led by stock gauges in Hong Kong, China, and Japan.
A swath of inflation prints from Australia to Japan, the euro region and the US is due this week as traders finesse bets on the outlook for monetary policy. The Federal Reserve’s favorite measure of underlying inflation is due on Friday and is expected to show modest relief. Fed Chair Jerome Powell has stressed the need for more evidence that inflation is on a path to the 2% goal before easing policy.
The ECB’s Lane is due to speak about inflation in Dublin on Monday. John Williams, Lisa Cook, Neel Kashkari and Lorie Logan are among the US central bankers due to speak this week.
Read More: About the ‘T+1’ Rule Making US Stocks Settle in a Day: QuickTake
Trading of cash Treasuries was closed. The “T+1” rule that has the potential to cause trouble for overseas investors will come into effect when traders return from the long weekend — making US equities settle in one day rather than two.Story continuesMeanwhile, gold edged higher, while iron ore and copper futures fell. Crude oil steadied after its biggest weekly loss in four. This year has witnessed a rolling series of commodity price spikes thanks to supply constraints, surging demand and even some speculative activity.
Some key events this week:
ECB’s Philip Lane speaks in Dublin on inflation, Monday
IMF holds discussions with Ukrainian authorities to review economic policies as the country seeks to unlock next tranche of $2.2 billion in aid, Monday
Cleveland Fed President Loretta Mester speaks at BOJ event in Tokyo; Minneapolis Fed President Neel Kashkari and ECB Governing Council member Klaas Knot address Barclays-CEPR International Monetary Policy forum, Tuesday
South African election, the most significant since the end of apartheid, Wednesday
Fed releases Beige Book economic survey, Wednesday
South Africa rate decision, US initial jobless claims, GDP, wholesale inventories, Thursday
New York Fed President John Williams speaks at the Economic Club of New York, Thursday
GDP data published for Canada, Eurozone, Turkey, Friday
Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 9:52 a.m. London time
S&P 500 futures were little changed
Nasdaq 100 futures were little changed
Futures on the Dow Jones Industrial Average fell 0.1%
The MSCI Asia Pacific Index rose 1%
The MSCI Emerging Markets Index rose 0.8%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0850
The Japanese yen was little changed at 156.91 per dollar
The offshore yuan was little changed at 7.2589 per dollar
The British pound was little changed at $1.2743
Cryptocurrencies
Bitcoin fell 0.2% to $68,528.56
Ether rose 1.2% to $3,906.91
Bonds
The yield on 10-year Treasuries declined one basis point to 4.46%
Germany’s 10-year yield was little changed at 2.59%
Britain’s 10-year yield was little changed at 4.26%
Commodities
Brent crude rose 0.3% to $82.33 a barrel
Spot gold rose 0.5% to $2,344.56 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess, Catherine Bosley and Michael Msika.
Most Read from Bloomberg Businessweek
TikTok Video Playing on Finance Bro Stereotype Becomes a Viral Hit
The Dodgers Mogul and the Indian Infrastructure Giant That Wasn’t
How the ‘Harvard of Trading’ Ruined Thousands of Young People’s Lives
The Six Choke Points That Can Upend Global Trade
A Hidden Variable in the Presidential Race: Fears of ‘Trump Forever’
©2024 Bloomberg L.P.View comments
