European stocks rise on hope of a ‘soft landing’ and China’s reopening

by Elizabeth Howcroft

LondonJan 9 – European stock indexes rose in early trade on Monday, boosted by expectations of a lower interest rate hike from the US Federal Reserve and optimism about the reopening of China’s borders.

* Investors took Friday’s US jobs data, which showed an increase in the workforce and slower wage growth, as a signal that the Federal Reserve may be less dovish, sending stocks rallying in global markets and putting pressure on the dollar.

* The bullish momentum in the markets continued on Monday, with Asian stocks rising after China reopened its borders, boosting the outlook for the global economy. Indicator MSCI Shares in Asia Pacific, excluding Japan, rose to their highest level in more than six months.

* The time is 0811 GMTIndicator MSCI Global stocks rose 0.5%, near their highest level since mid-December.

* the Stokes The Europe 600 rose 0.5%, near a one-month high and FTSE The London 100 rose 0.2%, extending the previous week’s gains, and hitting its highest level since 2019.

* “The market is reading that wage pressures are declining very quickly and sees that as a positive and people are probably whispering the words ‘soft landing’ even louder now,” said Hani Reda, global multi-asset portfolio manager at PineBridge.

* A soft landing is the ideal Fed policy objective after a rate hike, a situation in which inflation slows but there are not enough job losses to trigger a recession.

* Money markets rose by half a point in February at 25%, up from 50% a month earlier. Investors will be paying attention to the data CPI Thursday for more clues on the Fed’s next move.

– The dollar index fell by 0.1 percent, near its lowest level in seven months, after falling 1.2 percent on Friday. The euro rose 0.3%, trading at around $1.0673, compared to a gain of 1.2% on Friday.

* The Chinese yuan approached its highest level in five months against the US dollar at 6.7885 per dollar, while the Australian dollar approached. It is often considered an indicator of risk appetite It rose 0.8% to $0.6928, after hitting its highest level since late August early in the session.

Oil prices rose more than 2% as China’s reopening outweighed concerns about a global recession.

* In fixed income markets, European public debt yields rose, in a change of trend after sharp declines in the previous weeks. Germany’s benchmark 10-year bund rose 6 basis points, at 2.268%.

* The yield on the 10-year US Treasury rose 4 basis points to 3.606%, also rebounding after Friday’s sharp drop.

* Earnings season kicks off this week with major US banks, and analysts fear that there will be no annual growth in global profits.