European and Asian stocks rose on Monday as investors were cheered by German economic data that indicated inflation in Europe’s largest economy was slowing.
Europe’s region-wide Stoxx 600 rose 0.3 per cent, extending its rally from the previous week, while France’s CAC and London’s FTSE 100 both rose 0.4 per cent in the first hour of trade.
The data comes after Germany said its wholesale price index recorded its first year-on-year drop since December 2020. The fall added to signs the European Central Bank’s tightening campaign was cooling the region’s economy.
Asian stocks also rose, with China’s CSI climbing 1.5 per cent and Hong Kong’s Hang Seng index adding 1.5 per cent. China’s renminbi on Monday fell to its weakest level against the dollar in two months.
Turkey’s Bist 100 fell as much as 6.6 per cent, before rebounding to trade 4 per cent lower, as Turkey’s presidential election looked to be heading towards a second round. Veteran leader Recep Tayyip Erdoğan on Monday narrowly led his main rival Kemal Kılıçdaroğlu in a hotly contested election.
All sectors of the index were in negative territory early on Monday, though financial stocks were the worst performing, falling more than 9.1 per cent. The index has tumbled by almost a fifth this year. The lira fell 0.2 per cent against the US dollar to $19.65.
Traders were also looking ahead to the latest eurozone industrial production figures, which are expected to show a 2.5 per cent month-on-month decline in March, after a rise of 1.5 per cent in February, according to a Reuters poll of economists.
US futures rose, with contracts tracking Wall Street’s benchmark S&P 500 and those tracking the tech-heavy Nasdaq 100 rising 0.3 per cent ahead of the New York open.
Traders also prepared for the release of US retail sales data for April on Tuesday, which could offer insight into consumer sentiment as inflation cools. Analysts forecast that the Census Bureau would report a 0.7 per cent increase in overall retail sales from the previous month, following two months of declines. That will also reverse the drop of 0.6 per cent in March.
The yield on interest rate-sensitive two-year Treasury notes was down 0.019 percentage points at 4 per cent, while the yield on the 10-year note was up 0.013 percentage points at 3.48 per cent. Bond yields rise when prices fall.
The dollar fell 0.1 against a basket of six other currencies, despite data last week showing that US consumer expectations for long-run inflation had reached a 12-year high.
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