(Bloomberg) — European equities rose, while US index futures and Asian equities fell, as investors looked for pockets of value amid aggressive central banks, disappointing earnings and further consolidation of power in China.
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The dollar gained ahead of data on the Federal Reserve’s preferred inflation measure. The Stoxx Europe 600 Index rose for the second day. Contracts on the S&P 500 and Nasdaq 100 each fell at least 0.2%. Chinese tech stocks led to a sell-off in Asia amid signs that price wars and cash burns are undermining earnings. The yen fell lower after the nominee for the Bank of Japan’s top job signaled continued accommodative monetary policy.
Traders contend with a complicated investment landscape as they navigate the era of tighter monetary policy. Risks surrounding central banks’ continued battle against inflation are exacerbated by slowing growth and corporate performance, rising geopolitical tensions from Russia to North Korea and regulatory action in China.
“Rising tensions are certainly increasing safe haven flows to US Treasuries and interfering with aggressive Fed pricing,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note.
The European Stoxx 600 meter rose for a second day, almost recouping weekly losses as investors continued to favor the region known for value stocks over the US or China, where growth stocks are more dominant. Energy and construction companies were the best performing industry groups on the benchmark index.
A measure of Hong Kong-listed Chinese tech stocks fell 3.3%. NetEase Inc. slumped after a profit bust, while Alibaba Group Holding Ltd. fell as analysts remained cautious about sales growth prospects. Meanwhile, Chinese President Xi Jinping would bring decision-making over the financial system further under his control with the revival of a powerful committee.
The dollar rose for the third time in four days ahead of the release of the personal consumption expenditure index – the Fed’s preferred price gauge – which is expected to show an acceleration amid robust income and spending growth. Treasuries were mixed.
German interest rates fell after gross domestic product in Europe’s largest economy contracted by 0.4% in the fourth quarter, more than expected.
In commodities, oil extended Thursday’s gains as it broke its longest losing streak since December amid strong commodity currencies and signs of a willingness to take risks.
Bitcoin was on track for its second monthly run, breaking with stocks and other riskier assets that have slipped amid renewed concerns about rising interest rates.
Main events this week:
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US PCE deflator, personal spending, new home sales, University of Michigan consumer confidence, Friday
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Russia’s invasion of Ukraine marks its one-year milestone on Friday
Some of the major movements in markets:
Shares
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The Stoxx Europe 600 was up 0.4% from 8:43am London time
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S&P 500 futures fell 0.2%
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Nasdaq 100 futures fell 0.5%
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Futures on the Dow Jones Industrial Average fell 0.1%
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The MSCI Asia Pacific Index fell 0.6%
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The MSCI Emerging Markets Index fell 1.3%
Currencies
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro was little changed at $1.0594
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The Japanese yen fell 0.1% to 134.88 per dollar
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The offshore yuan fell 0.5% to 6.9527 per dollar
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The British pound rose 0.2% to $1.2039
Cryptocurrencies
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Bitcoin rose 0.1% to $23,905
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Ether rose 0.5% to $1,653.78
Bonds
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The yield on 10-year government bonds was little changed at 3.88%
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German 10-year yields fell by three basis points to 2.45%
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UK 10-year yields fell by three basis points to 3.56%
Raw materials
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Brent oil rose 1.2% to $83.22 a barrel
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Spot gold rose 0.2% to $1,825.35 an ounce
This story was created with the help of Bloomberg Automation.
–With assistance from Tassia Sipahutar, Rob Verdonck, Richard Henderson and Matthew Burgess.
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