Europe stocks, US futures up before central banks meet

Bloomberg

European stocks and US futures rise on Monday as traders prepared for a wave of central bank decisions this week amid concerns about economic risks from the omicron virus variant.
Miners led an advance in Europe’s Stoxx 600 Index as the price of iron ore jumped on expectations that China will move to increase the stimulus next year. US shares closed at a record after an inflation print that was high, but in line with predictions.
The Federal Reserve on Wednesday is expected to speed up stimulus withdrawal and perhaps open the door to earlier interest-rate hikes in 2022 if price pressures stay near a four-decade peak. The 10-year US Treasury yield held at 1.49% and the dollar pushed higher.
The pound retreated after Prime Minister Boris Johnson warned the UK is facing a “tidal wave” of omicron infections and set an end-of-year deadline for the country’s booster vaccination program.
About 20 central banks are due to hold meetings this week, including the Fed, the European Central Bank (ECB) and the Bank of England (BOE). Those decisions have the potential to stir market swings, as traders evaluate the resilience of global reopening to less generous monetary settings and coronavirus challenges.
“Global equities had a solid run last week and we’ll see if the goodwill lasts into what is a behemoth when it comes to event risk,” Chris Weston, head of research with Pepperstone Financial Pty Ltd, wrote in a note. Omicron and the Fed should dictate sentiment, he added.
MSCI Inc’s Asia-Pacific share gauge slipped, reversing an earlier climb. A sudden drop in the bonds of developer Shimao Group Holdings Ltd damped the mood by renewing concerns over the health of Chinese property firms amid Beijing’s clampdown on the real-estate sector.
In cryptocurrencies, Bitcoin and Ether falls. An affiliate of Binance, the world’s biggest crypto exchange, withdrew its application for a license to run a digital-token exchange in Singapore.
Elsewhere, commodities such as oil and iron ore rallied. Some of that move came amid signs China may take steps to boost its economy — a narrative that had helped Asian stocks on Monday before sentiment turned more mixed.
China’s top decision makers last week signalled policies may become more supportive of growth next year. Economists predict China will start adding fiscal stimulus early next year.
The Stoxx Europe 600 rises 0.3% as of 8:24 am London time and futures on the S&P 500 also climb 0.3%.
While futures on the Nasdaq 100 rise 0.2%, futures on the Dow Jones Industrial Average also gain 0.3%.
The MSCI Asia Pacific Index falls 0.7% and the MSCI Emerging Markets Index also drops as much as 0.7%.
While the Bloomberg Dollar Spot Index rises 0.2%, the euro falls 0.2% to $1.1286 and the Japanese yen falls 0.2% to 113.62 per dollar. The offshore yuan rises 0.1% to 6.3688 per dollar and the British pound falls 0.3% to $1.3236.
The yield on 10-year Treasuries was little changed at 1.49% and Germany’s 10-year yield was little changed at -0.34%. Britain’s 10-year yield was little changed at 0.74%
Brent crude rises 0.8% to $75.77 a barrel, spot gold also gains 0.2% to $1,785.84 an ounce.