European stocks rose and Treasury yields ticked lower on signs that US negotiators are moving closer to striking a debt deal.
(Bloomberg) — European stocks rose and Treasury yields ticked lower on signs that US negotiators are moving closer to striking a debt deal.
The yield on two-year notes hovered at 4.52%, the highest since March, after increasing for 10 straight days. The premium investors demand to hold US paper that’s most at risk of default if Congress and the White House fail to strike a deal has receded, but anxieties remain high.
Mining stocks pulled European benchmarks higher as commodity prices rebounded. ASML Holding NV rose 1.7% and BE Semiconductor added 2%, extending yesterday’s frenzy for any company working on artificial intelligence technology. US futures were steady.
“The market remains very much focused on the US debt ceiling talks, even though we have been in this situation a number of times in the recent past,” said Stuart Cole, head macro economist at brokerage at Equiti Capital UK Ltd. “The recovery seen yesterday following the better sales forecast from Nvidia suggests that as soon as an opportunity arises, the worries over the debt talks are quickly forgotten.”
The AI rally continued after hours in the US, when Marvell Technology Inc. projected 2024 revenue from the technology will at least double from a year ago. Among notable moves in Asia, Japan’s Screen Holdings Co. surged as much as 9%, South Korea’s SK Hynix Inc. jumped 6.8% and Taiwan Semiconductor Manufacturing Co. advanced 4.6%.
Benchmark indexes rose in Japan, South Korea, India and Australia, while those for mainland China pared earlier declines. China’s central bank will likely cut the reserve requirement ratio for major banks earlier than expected, according to the latest Bloomberg survey of economists.
Hong Kong’s market was closed Friday for a public holiday.
A gauge of the dollar’s strength fell, while the yen strengthened slightly versus the greenback while remaining near 140 level. The Japanese currency has depreciated amid bets that the Federal Reserve will hike rates within the next two policy meetings while its counterpart in Tokyo sticks with ultra-loose policy.
Read more: US on ‘Borrowed Time’ as Debt Cap Drives Cash Below $50 Billion
Elsewhere in markets, oil was steady after falling more than 3% on Thursday as Russia suggested OPEC+ wasn’t likely to change production levels at its next meeting.
Key events this week:
- US consumer income, wholesale inventories, durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.4% as of 8:25 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures fell 0.1%
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index rose 0.5%
- The MSCI Emerging Markets Index rose 0.6%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.1% to $1.0740
- The Japanese yen rose 0.2% to 139.73 per dollar
- The offshore yuan rose 0.4% to 7.0620 per dollar
- The British pound rose 0.2% to $1.2349
Cryptocurrencies
- Bitcoin fell 0.2% to $26,441.76
- Ether was little changed at $1,810
Bonds
- The yield on 10-year Treasuries declined one basis point to 3.81%
- Germany’s 10-year yield advanced three basis points to 2.55%
- Britain’s 10-year yield advanced two basis points to 4.40%
Commodities
- Brent crude rose 0.3% to $76.47 a barrel
- Spot gold rose 0.5% to $1,951.46 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee and Rob Verdonck.
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