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Europe Stocks Gain on Bank Earnings, Fed Optimism: Markets Wrap

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(Bloomberg) — European stocks advanced on a busy day for company earnings with optimism growing that the Federal Reserve will start cutting interest rates this year.

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The Stoxx 600 index rose 0.6% as UBS Group AG jumped more than 6% after it returned to profit and UniCredit SpA climbed on better-than-forecast results. US futures were little changed, while a gauge of Asian equities headed for its longest streak of gains since February. Ten-year Treasuries extended their advance, with the yield dipping three basis points to 4.46%.

Equity markets are getting a lift as investors turn more optimistic on the timing of possible Fed interest rate reductions after last week’s soft US jobs data. There are signs of enduring weakness in Europe’s largest economy as German factory orders unexpectedly dropped in March.

German semiconductor-maker Infineon Technologies AG cut its revenue forecast, signaling demand from the automotive industry remains weak.

“One part of the European equities that we are not so bullish about — we are indeed underweight — is the auto sector,” Beata Manthey, head of European equity strategy at Citigroup Inc. “Trade tensions is something that we worry about a lot. “

Minneapolis Fed President Neel Kashkari is among the officials scheduled to speak later on Tuesday.

Oil advanced for a second day on tensions in the Middle East, with Israel rejecting a cease-fire proposal for the Gaza Strip.

Key events this week:

  • Eurozone retail sales, Tuesday

  • Walt Disney earnings Tuesday

  • Minneapolis Fed President Neel Kashkari speaks, Tuesday

  • Toyota earnings, Wednesday

  • Fed Governor Lisa Cook speaks, Wednesday

  • Bank of Japan issues summary of opinions from April policy meeting, Thursday

  • China trade, Thursday

  • UK BOE rate decision, Thursday

  • US initial jobless claims, Thursday

  • UK industrial production, GDP, Friday

  • ECB publishes account of April policy meeting, Friday

  • BOE Chief Economist Huw Pill speaks, Friday

  • US University of Michigan consumer sentiment, Friday

  • Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 rose 0.6% as of 9:21 a.m. London time

  • S&P 500 futures were little changed

  • Nasdaq 100 futures fell 0.1%

  • Futures on the Dow Jones Industrial Average were little changed

  • The MSCI Asia Pacific Index rose 0.3%

  • The MSCI Emerging Markets Index rose 0.1%

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0760

  • The Japanese yen fell 0.1% to 154.15 per dollar

  • The offshore yuan was little changed at 7.2189 per dollar

  • The British pound fell 0.2% to $1.2535

Cryptocurrencies

  • Bitcoin rose 1.3% to $64,139.41

  • Ether rose 0.8% to $3,100.51

Bonds

  • The yield on 10-year Treasuries declined three basis points to 4.46%

  • Germany’s 10-year yield declined three basis points to 2.44%

  • Britain’s 10-year yield declined seven basis points to 4.15%

Commodities

  • Brent crude rose 0.3% to $83.56 a barrel

  • Spot gold fell 0.4% to $2,315.63 an ounce

This story was produced with the assistance of Bloomberg Automation.

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