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Bloomberg
Stocks advanced and US equity futures inched higher ahead of commentary due later from Federal Reserve Chair Jerome Powell that may shape views on the central bank’s rate path.
Energy shares led gains in Europe after oil major BP Plc boosted shareholder returns and reported record profit. Futures on the S&P 500 and Nasdaq 100 contracts were modestly higher, while those on the Dow were flat. Pinterest Inc. fell in premarket trading after posting weaker-than-forecast revenue.
A gauge of Asian shares gained after its biggest two-day drop in four months. Baidu Inc. surged after affirming it will launch a ChatGPT-like bot in March.
The dollar steadied after weakening against all members of the Group of 10 earlier, while Treasuries clawed back some of the two-day rout that was sparked by traders ramping up bets on future Fed tightening. The recent moves have taken the shine off the best start to a year for cross-asset returns since 1987.
Investors are assessing whether Powell will dampen market optimism for interest-rate cuts later in 2023, following January’s strong payrolls report and comments from other Fed officials about the possibility of a higher peak than policy makers had previously expected.
“I expect that Powell will drive home that point that they’ve done a lot and there’ll be a tightening that is going to impact the economy later on this year,†Jack McIntyre, a portfolio manager at Brandywine Global Investment Management LLC, said on Bloomberg Television.
In Asia, the yen gained after Japan’s wage data blew past estimates, stoking bets the central bank will adjust or back away from its stimulus program under a new governor.
Elsewhere, oil rose for a second session after Saudi Arabia unexpectedly raised its crude prices to Asia, signalling confidence in the demand outlook. Gold advanced.
The Stoxx Europe 600 rose 0.2% as of 10:06 am London time and S&P 500 futures rose 0.1%. While Nasdaq 100 futures rose 0.3%, futures on the Dow Jones Industrial Average were unchanged and the MSCI Asia Pacific Index rose 0.4%. The MSCI Emerging Markets Index was little changed.
The Bloomberg Dollar Spot Index was little changed and the euro fell 0.1% to $1.0710.
While the Japanese yen rose 0.6% to 131.89 per dollar, the offshore yuan rose 0.1% to 6.7975 per dollar and the British pound fell 0.1% to $1.2001.