Europe Stocks Gain on China; Brent Steady Near $90: Markets Wrap

(Bloomberg) — European stocks climbed, buoyed by China’s latest stimulus measures and wagers US interest rates may be approaching a peak.

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The Stoxx 600 gauge rose 0.7%, halting three days of losses. Futures in the US also advanced after the S&P 500 Index’s best week since June. Crude prices steadied near the highest level since November as traders awaited further OPEC+ supply cuts. US markets are shut Monday for the Labor Day holiday.

Friday’s US jobs report showed a labor market undergoing a controlled cooling, giving the Fed room to pause rate increases this month while keeping options open for another hike later in the year. The Chinese government last week said it will allow the nation’s largest cities to cut down payments for home buyers and encouraged lenders to lower rates on existing mortgages.

“We have been looking for more significant property rescue measures for some time to shore up sentiment and consumer confidence,” UBS Global Wealth Management Chief Investment Officer Mark Haefele said. “This now appears to be materializing in a more convincing way.”

WTI crude was flat at $85.53 per barrel, while Brent was also steady at $88.51. Oil climbed last week as Russia announced that it will extend export curbs, with more details of the reductions to be released in the coming days. Saudi Arabia — which along with Moscow sets the tone at the OPEC+ alliance — is widely expected by traders to follow suit by pushing its voluntary curbs into October.

In Asia, Hong Kong benchmark indexes outperformed the region as investors resumed trading after a closure on Friday. Real estate stocks extended their advance, with a Chinese property shares gauge rising above 7% on stimulus measures taken to bolster the sector.

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Sentiment was further propped up by news that distressed Chinese builder Country Garden Holdings Co. won approval from creditors over the weekend to extend a maturing yuan bond. Its shares jumped. However, the developer has just days to avoid default on some dollar bonds.

This year’s US stock market rally is strong enough to withstand another leg higher for bond yields, according to the latest Markets Live Pulse survey.

“The incoming data supports our view of a ‘softish’ landing for the US economy,” Haefele said. “But remaining uncertainties are likely to keep investors guessing the Fed’s next move and keep market price action choppy.”

Key events this week:

• Labor Day holiday in US and Canada, Monday

• ECB President Christine Lagarde makes speech at seminar organized by the European Economics & Financial Center, Monday

• Australia current account, rate decision, Tuesday

• Japan household spending, Tuesday

• China Caixin services PMI, Tuesday

• Eurozone S&P Global Eurozone Services PMI, PPI, Tuesday

• US factory orders, Tuesday

• ECB President Christine Lagarde chairs panel focused on central banks and international sanctions at ECB Legal Conference, Tuesday

• Australia GDP, Wednesday

• Eurozone retail sales, Wednesday

• Germany factory orders, Wednesday

• US trade, Wednesday

• Canada rate decision, Wednesday

• Bank of England Governor Andrew Bailey testifies to the UK parliament’s Treasury Select Committee, Wednesday

• Federal Reserve issues Beige Book economic survey, Wednesday

• Boston Fed President Susan Collins speaks on the economy at New England Council, Wednesday

• China trade, forex reserves, Thursday

• Eurozone GDP, Thursday

• US initial jobless claims, Thursday

• Bank of Canada Governor Tiff Macklem to speak on the Economic Progress Report, Thursday

• New York Fed President John Williams participates in moderated discussion at the Bloomberg Market Forum, Thursday

• Atlanta Fed President Raphael Bostic speaks on economic outlook at Broward College, Thursday

• Japan GDP, Friday

• France industrial production, Friday

• Germany CPI, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.7% as of 8:24 a.m. London time

• S&P 500 futures rose 0.1%

• Nasdaq 100 futures rose 0.2%

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index rose 1.1%

• The MSCI Emerging Markets Index rose 1.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%

• The euro rose 0.2% to $1.0803

• The Japanese yen was unchanged at 146.22 per dollar

• The offshore yuan was little changed at 7.2679 per dollar

• The British pound rose 0.3% to $1.2627

Cryptocurrencies

• Bitcoin fell 0.3% to $25,976.66

• Ether fell 0.2% to $1,638.97

Bonds

• The yield on 10-year Treasuries was little changed at 4.18%

• Germany’s 10-year yield advanced two basis points to 2.57%

• Britain’s 10-year yield advanced two basis points to 4.44%

Commodities

• Brent crude was little changed

• Spot gold rose 0.2% to $1,943.96 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from John Cheng and Krystof Chamonikolas.

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