Shares are rising due to better sentiment, while oil is worth $ 120

Shares are rising due to better sentiment, while oil is worth $ 120

US stocks rose on Monday, following gains in Asia and Europe on signs of easing restrictions by China, and as investors prepared for expected interest rate hikes in the coming days, despite crude oil reaching $120 per barrel. The dollar rose against the euro ahead of the European Central Bank’s policy meeting on Thursday, but fell against commodity currencies such as the Canadian, Australian, and New Zealand dollars as risk appetite increased.

A Wall Street Journal report that Chinese regulators are concluding probes into ride-hailing giant Didi Global Inc , as well as the easing of domestic COVID curbs, have bolstered sentiment, said Marc Chandler, chief market strategist at Bannockburn Global Forex. “You’ve got the world’s second-largest economy continuing to open up,” he said. “It looks like Didi may be available again at the mobile app stores and Beijing opened up public transportation.”

Sterling rose ahead of a confidence vote in Parliament on Prime Minister Boris Johnson after fellow Conservative lawmakers questioned his leadership in the wake of the so-called partygate scandal. The vote is expected to end by 8 p.m. local time (1900 GMT) and the result announced later.

Didi shares surged 37.3% on the Journal report, and the news helped Hong Kong’s Hang Seng tech index close 4.6% higher. . Sentiment also was aided by comments from U.S. Commerce Secretary Gina Raimondo that President Joe Biden has asked his team to look at the option of lifting some tariffs on Chinese imports. People no longer speculate that the Federal Reserve might hike interest rates by 75 basis points and have backtracked a bit from a 50 basis-point hike in September, which also has boosted sentiment, Chandler said.

U.S. Treasury yields rose as the market prepared for the sale of $96 billion in debt this week and ahead of data on Friday expected to show U.S. inflation is still running hot. The consumer price index (CPI) is expected to have gained 0.7% last month, compared with 0.3% in April, with annual inflation unchanged at 8.3%, according to the median estimate of economists polled by Reuters.

The major U.S. stock indexes rose, as did the big bourses for Britain, Germany, France, Italy and Spain, all closing up 1% or higher. The pan-European STOXX 600 index rose 0.92% and MSCI’s gauge of stocks across the globe gained 0.31%. On Wall Street, the Dow Jones Industrial Average fell 0.08% after briefly dipping lower. The S&P 500 gained 0.20% and the Nasdaq Composite added 0.25%. Growth shares rose 0.3%, or more than double the 0.1% advance in value stocks.

The three U.S. debt auctions this week are likely to push yields higher as banks and investors prepare to absorb the issuance. The yield on 10-year Treasury notes was up 7.9 basis points at 3.034%, the first time the benchmark’s yields have topped 3% in almost three weeks.

At the ECB meeting on Thursday, President Christine Lagarde is considered certain to confirm an end to bond-buying this month and a first rate increase in July, though the jury is out on whether that will be 25 or 50 bps, as some investment banks ramped up their expectations. Money markets are priced for 130 bps of rate increases by year-end, with a 50 bps move at a single meeting fully priced in by October.

A high number would only add to expectations of aggressive tightening by the Fed next week, with markets already priced for half-point increases in June and July and almost 200 basis points (bps) by the end of the year. The dollar index rose 0.313%, with the euro down 0.29% at $1.0688. The yen weakened 0.82% to 131.96 per dollar. Oil prices were largely unchanged in choppy trade, buoyed by Saudi Arabia raising its July crude prices but amid doubts a higher output target for OPEC+ producers would ease tight supply. U.S. crude futures settled down 37 cents at $118.50 a barrel and Brent fell 21 cents to settle at $119.51. Gold prices slid, pressured by an uptick in the dollar and Treasury yields. U.S. gold futures settled down 0.4% at $1,843.70 an ounce.

 

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