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Bloomberg
European equities wavered on Tuesday in the wake of tech-stock fuelled gains on Wall Street and bets for less-aggressive interest rate hikes from the Federal Reserve.
The Stoxx 600 Index erased an early advance to trade little changed. US equity futures ticked lower after the best two-day rally since November for the tech-heavy Nasdaq 100. Treasury yields fell for the first day in four.
Expectations the Fed will moderate its tightening campaign are driving a New Year rally for assets from tech to emerging markets. That’s also sapped dollar strength and given breathing room to importers outside of the world’s biggest economy.
A gauge of greenback strength was slightly lower, with the currency also showing weakness versus all of its Group-of-10 counterparts.
Markets have priced in a smaller 25-basis-point hike at the Fed’s January 31-February 1 meeting.
The rebound in risk assets will be tested this week by a wave of US corporate earnings, especially for marquee names like Microsoft Corp. and Intel Corp. that will help shape
the outlook for the technology sector.
Elsewhere in markets, oil steadied as traders waited for fresh signals on the state of Chinese crude demand after the nation ditched Covid curbs. Copper steadied near the highest level in seven month and gold held a small gain.
The Stoxx Europe 600 was little changed as of 8:44 am London time and S&P 500
futures were little changed.
While Nasdaq 100 futures were little changed, futures on the Dow Jones Industrial Average were little changed and the MSCI Asia Pacific Index rose 0.7%. The MSCI Emerging Markets Index was little changed.
The Bloomberg Dollar Spot Index fell 0.1% and the euro was little changed at $1.0875.
While the Japanese yen rose 0.5% to 129.99 per dollar, the offshore yuan was little changed at 6.7815 per dollar and the British pound rose 0.1% to $1.2397.
Bitcoin rose 0.4% to $23,083.97 and ether also climbs 0.3% to $1,636.92.
While the yield on 10-year Treasuries declined two basis points to 3.49%, Germany’s 10-year yield declined three basis points to 2.17% and Britain’s 10-year yield declined four basis points to as much as 3.32%
Brent crude was little changed and spot gold rose 0.4% to $1,939.39 an ounce.