Home / Business / Yields on euro bonds and bonds extend upwards in the ECB, while appetite for risk grows

Yields on euro bonds and bonds extend upwards in the ECB, while appetite for risk grows



LONDON (Reuters) – Euro and bond yields rose on Thursday, as investors traded in an early decline in the European Central Bank's stimulus, while the renewed appetite for risk led global stocks to a maximum of 3-1 / 2 weeks.

PHOTOGRAPHIC FILE: The German stock price index, DAX board, is listed on the stock exchange in Frankfurt, Germany, March 20, 2018. REUTERS / Staff / Remote

Massive sale of safe and secure bonds US Treasury bonds UU money in higher-risk assets, especially financial stocks, despite investor concerns about how the G7 leaders summit that begins Friday will come to light in light of the divisions over world trade.

Bank shares, which tend to benefit from higher bond yields, boosted European shares. The pan-European banking index .SX7P rose 0.5 percent, supporting the STOXX 600.

Banks continue to be the sector with the worst performance in Europe so far this year, however, they have been affected by the political risk in Italy.

The MSCI index of global stocks .MIWD00000PUS rose 0.2 percent to its highest level since May 14.

Wall Street also had a positive opening with the futures of the Dow Jones and S & P 500 index rising 0.1 to 0.2 percent. However, the Nasdaq .IXIC, of ​​advanced technology, was ready for a descent from its record.

In Europe, the single currency EUR = reached its highest level since May 15 at $ 1.1838, and traded up 0.4 percent at $ 1.1815 in its fourth consecutive session of gains . It helped boost the dollar index. DXY fell 0.4 percent to 93,295.

The performance of Germany's 10-year benchmark bonds DE10YT = TWEB rose at the same rate as the euro, breaking 0.50 percent for the first time in two weeks with signs that the European Central Bank could end to your stimulus program.

Massive selling in German Bunds spread across the Atlantic when the US 10-year yield UU US10YT = RR reached a 2-1 / 2 week high of 2.9940 percent, approaching the 3 percent level that they violated a month ago.

ECB chief economist Peter Praet said on Wednesday that solid growth led the bank to rely more and more on inflation returning to its target, increasing the chances of it revealing more about the end of the bond purchase program at the meeting next week.

PHOTO OF THE ARCHIVE: A visitor is seen as the market prices are reflected in a glass window on the Tokyo Stock Exchange (TSE) in Tokyo, Japan, on February 6, 2018. REUTERS / Toru Hanai / Archive Photo

Praet's comments took the market by surprise, given the recent slowdown in the eurozone economy.

Thursday's data showed that German industrial orders unexpectedly plummeted in April, a fourth consecutive monthly decline.

"It's a complex backdrop in which the economy is not doing badly, but the economic surprises in Europe have not been upwards," said Antoine Lesne, head of EMEA strategy and research at SPDR ETF. State Street.

"The bad moment has alleviated the general context that the ECB is handling, but if you look at the broader macro, it remains positive for risky assets."

Bank of America Merrill Lynch analysts said that Praet's speech the central bank was willing to look through the recent soft patch in the euro zone data.

TOO MUCH ALCISTA?

Risk movements in all markets coincided with a calendar of potentially destabilizing political events.

The run-up to the G7 summit has been dominated by a growing division over trade between United States President Trump and the club's remaining six members.

But indicators of investor anxiety, including stock volatility, showed little sign of tension, which puzzled some investors.

The VIX, which measures the volatility of the S & P 500 .VIX, traded at 11.79. It has fallen from more than 50 to less than 12 in just 83 days, a record fall, operators said.

"I'm surprised to see everyone so bullish," said Charles de Boissezon, deputy director of global asset allocation and equity strategy at Societe Generale.

"Everyone assumes that … central banks will be behind the default curve, but it's not that obvious."

Raw materials continued to rise thanks to a still strong global economy and tight supply.

The copper CMCU3 reached its highest level this year at $ 7,295 per ton, driven up by 0.8 percent due to concerns about the disruption at the Escondida mine in Chile. He was on his way for his sixth consecutive day of gains, his longest streak since December.

Oil prices also rose because the downward exports of OPEC member Venezuela reduced supply in the market.

Brent LCOc1 crude futures rose 1.4 percent to $ 76.46 a barrel and CLc1 crude from West Texas Intermediate (WTI) rose 1 percent to $ 65.39.

Gold prices rose, with gold spot XAU = trading at $ 1,298.75 per ounce, an increase of 0.2 percent.

In emerging markets, .MSCIEF shares rose 0.4 percent to a maximum of three weeks, supported by the weaker dollar. UBS analysts declared the "buy time" of emerging stocks, improving Mexico, Poland and Colombia, while downgrading Brazil's rating.

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Reports by Helen Reid, edition by John Stonestreet and Alexander Smith [19659033]


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