Europe stocks, US futures advance on Russia report

Bloomberg

European stocks and US futures rise on Tuesday after a report fueled optimism that Russia is de-escalating tensions with Ukraine.
All sectors in Europe’s Stoxx 600 Index posted gains and US benchmarks climbed. The ruble and Russian stocks rallied after Interfax reported that Russia’s southern and western armies are returning to their bases. Treasury yields advanced, while the dollar slipped.
European natural gas prices dropped as signs of reduced geopolitical risks eased some concerns over energy supplies to the continent. West Texas Intermediate crude fell, but remained near $95 a barrel after earlier scaling that mark for the first time since 2014.
Meanwhile, iron ore tumbled as Beijing ramped up a campaign to stop prices overheating even before the government rolls out demand-boosting the stimulus measures this year.
Among individual stock moves, Glencore Plc jumped to a 10-year high after saying it expects long-running corruption probes by US and UK authorities to be resolved this year as the world’s biggest commodity trader reported its highest-ever profit and almost $4 billion in shareholder returns. Banco BPM SpA climbed to highest level since May 2016.
Diplomatic efforts are continuing to defuse the Ukraine situation, with German Chancellor Olaf Scholz set to meet Russian President Vladimir Putin on Tuesday. While US officials have warned a Russian invasion may be imminent, Moscow has repeatedly denied that one is planned. The crisis added to market concerns over high inflation and the withdrawal of Fed stimulus.
“What we are seeing is a Fed that is reacting to inflationary prints even though many of the pressures on inflation are factors that the Fed really can’t solve,” Kristina Hooper, chief global market strategist at Invesco, said on Bloomberg Television. “So that certainly increases the risks and reduces the clarity.”
Fed officials came out with another round of views on the policy outlook. Fed Bank of St. Louis President James Bullard said the monetary authority needs to move forward its plans to raise rates to underline its inflation-fighting credibility.
Fed Bank of Kansas City President Esther George said the central bank should take a systematic approach to removing policy accommodation but be careful to not “oversteer.”
The Stoxx Europe 600 rises 0.8% as of 8:57 am London time and futures on the S&P 500 also climb 1%. While futures on the Nasdaq 100 rise 1.4%, futures on the Dow Jones Industrial Average also gain 0.7%.
The MSCI Asia Pacific Index falls 1.5% and the MSCI Emerging Markets Index also drops as much as 1.6%. The Bloomberg Dollar Spot Index falls 0.2% and the euro rises 0.3% to $1.1341.
While the Japanese yen was little changed at 115.55 per dollar, the offshore yuan was little changed at 6.3513 per dollar and the British pound rises 0.2% to $1.3552.
The yield on 10-year Treasuries advanced four basis points to 2.03% and Germany’s 10-year yield was little changed at around 0.29%.