European Stocks Struggle as Nestle Disappoints; Bonds, Yen Rise

European shares faltered at a two-week high as investors assessed disappointing earnings from Nestle SA, while government bonds rose and oil held gains.

Stocks in Europe fell 0.1 percent at 9:11 a.m. in London. Treasuries advanced, and the yen also climbed. Japan sold five-year bonds at auction with a negative yield for the first time. Emerging markets and currencies rose.

The Mexican peso gained a second day after lawmakers took unprecedented steps to protect the currency. Crude held gains with Iran backing an output freeze by key energy-producing nations.

Global stocks have regained much ground after falling into a bear market last week, fueled by oil’s rally coupled with the Federal Reserve’s acknowledgment of market gyrations.

St. Louis Fed President James Bullard said Wednesday recent turmoil that’s contributed to a further decline in investors’ inflation expectations has given the central bank scope to delay raising interest rates.

China’s consumer price inflation quickened while factory-gate deflation moderated, signaling that demand is beginning to stabilize

European Factors to Watch-Equity futures rise as oil prices extend rebound

Jan 25 European equity futures rose on Monday, helped by gains on Asian markets and another rebound in oil prices.

Futures on the Euro STOXX 50, German DAX, French CAC and Britain's FTSE all rose by between 0.5-0.8 percent.

The pan-European FTSEurofirst 300 index closed up 3 percent on Friday, with the index also marking its first weekly rise of the year last week, and that momentum was expected to continue at the start of trading on Monday.

Portuguese stocks could also come into focus after centre-right candidate Marcelo Rebelo de Sousa won Portugal's presidential election on Sunday, an outcome that should help maintain political balance after a dramatic swing to the left in October's parliamentary ballot.

The Spanish market could also be in focus after Spain's acting prime minister, Mariano Rajoy, deferred on Friday a decision on whether to seek a confidence vote to form a government, forcing a new round of talks on resolving the country's political deadlock.

Asian stocks on Monday moved further away from four-year lows struck last week, as a cold spell in parts of the northern hemisphere pushed oil prices higher and relieved some of the bearish pressure on global markets.

World equities also took heart from the European Central Bank last week signalling additional monetary easing steps to come, raising hopes that other central banks, like the Bank of Japan, would take the same path.

Draghi says ECB willing to act fast on rates, QE to boost inflation

The European Central Bank is ready to act quickly to boost anemic inflation in the euro zone, its president said on Friday, highlighting changes to its asset purchase program and deposit rate as possible tools.

Mario Draghi's comments offered the strongest hint yet that the ECB will unveil fresh stimulus measures at its Dec. 3 meeting to stop inflation from falling further below its target of just under 2 percent.

The ECB has bought 60 billion euros ($64 billion) a month of mostly government bonds since March to help revive inflation, but prices rose just 0.1 percent in October.

Draghi defended the ECB's quantitative easing (QE) asset purchase program, saying it had brought down borrowing costs for euro zone companies. He said the scheme could be expanded and extended and its composition changed to provide further stimulus.

He said the ECB could also change the level of its deposit rate to boost the impact of QE. The ECB's deposit rate is currently -0.20 points, meaning banks are charged to park cash at the ECB, giving them an added incentive to lend, rather than pile reserves at the central bank.

Markets are expecting further ECB action on Dec. 3, most likely including a further cut to the deposit rate and an extension of the asset purchases beyond their scheduled end in September 2016.

European Central Bank News

ECB to decide in December if quantitative easing needs ramping up - Draghi

The European Central Bank will decide at its next meeting whether its asset-purchase program can counter a global economic slowdown or needs to be ramped up, its president said on Thursday.

"We need to examine whether, with a weakening of the global economy, it (the program) is also effective in countering headwinds that could hamper a return to price stability in the medium term," Mario Draghi said at an academic event in Milan.

European Stock Market News - European Shares Higher

European shares edge up led by Renault

Telecom Italia rose sharply for a second day.

European shares edged higher in opening deals on Friday, and were set for a positive close on the month, with gainers led by car maker Renault after a rise in quarterly profits and phone group Telecom Italia on stake building news.

The pan-European FTSEurofirst 300 index was up 0.2%, while the eurozone's blue-chip Euro STOXX 50 index  also gained 0.2%.

The pan-European FTSEurofirst 300 is up more than 8% so far in October, as the European Central Bank (ECB) has signalled the possibility of stronger stimulus measures.

Renault rose 5.8% after third-quarter revenue increased 9.4%, lifted by growing business with partners Nissan and Daimler, as well as sales of its own new models in a rebounding European market.

Analysts at SocGen and Nomura lifted their target prices on Renault to €101 and €107 respectively, both keeping a buy rating on the stock.

Telecom Italia rose sharply for a second day to gain more than 3% after the founder of Iliad raised a stake in the Italian telecoms group to 15%.

But British Airways owner IAG fell 4.6% despite upgrading its 2015 profit outlook after third-quarter results beat expectations.

European Stock Market News - European Shares Rose

European stocks firm, dollar near two-and-a-half-month highs as Fed revives Dec hike talk

Europe Shares Rise

European shares rose, while the U.S. dollar stood near 2 1/2 month highs against the euro on Thursday, after the Federal Reserve gave a vote of confidence to the U.S. economy and revived expectations it may raise interest rates by year-end.

The Fed, which kept its rates on hold as expected, took the unusual step of strengthening its language about timing in its statement, bringing a December rate hike back on the table.

In another hawkish tilt, the Fed also took out a warning about slowing global growth, going against earlier speculation that China's cooling economy could delay a rate hike in the United States. 

The pan-European FTSEurofirst 300 index .FTEU3 was up 0.3 percent at 1,489.45 points by 0811 GMT, while Japan's Nikkei share average .N225 gained 0.2 percent to close at 18,935.71.

That came after Wall Street ended a volatile session with solid gains, underpinned by the Fed's vote of confidence in the U.S. economy. The Fed's relatively upbeat stance came despite recent worries about global growth due to a slowdown in China.

In overnight trade, U.S. Treasury yields and the dollar rose while shares initially sold off and then reversed, after the Fed explicitly referred in its statement at the end of its two-day policy meeting, to conditions necessary "to raise the target range at its next meeting." Reference to a particular meeting is rare for the Fed.

European Stock Market News - European Shares Fell

European shares slip as easing expectations fade

Europe stock exchange website Binary Options Trading Platform 

European shares fell in early trading on Monday as euphoria about the prospect of further central bank policy easing faded, with investors warning against over-confidence ahead of another week of interest rate decisions.

Comments on Monday from a key economic adviser to Prime Minister Shinzo Abe, who said the Bank of Japan did not need to boost its monetary stimulus as early as this week, have tempered expectations that Friday's policy review will see new action.

The monthly Ifo survey of German business morale dipped in October but beat forecasts, suggesting Europe's largest economy remains resilient in the face of a slowdown in emerging markets and the emissions scandal at carmaker Volkswagen (VOWG_p.DE).

Corporate expectations over a half-year horizon hit a seven-month high, suggesting many firms believe they can cope with the economic headwinds.

Bets that Japan's already massive stimulus would be increased had risen after China's cut interest rates last week and the European Central Bank indicated it may add to its asset purchase program in December. 

The U.S. Federal Reserve, which also meets this week, is also increasingly seen delaying its first rate increase for nearly a decade until next year.

Global equities, which have rebounded 10 percent from the depths of September's sell-off, were broadly flat on Monday, with the pan-European FTSEurofirst 300 .FTEU3 index down 0.3 percent. MSCI's index of Asia-Pacific shares outside Japan edging up 0.1 percent.

Poland's benchmark equity index .WIG20 reversed early falls and rose 0.5 percent after the main opposition party Law and Justice won weekend parliamentary elections.

The party confirmed its plan to introduce a banking tax as of January 2016, which hit bank stocks like PKO BP PKO.WA and mBank MBK.WA.

Nasdaq 100 index may see record with Apple earnings due Tuesday

The Nasdaq 100 index, dominated by U.S. technology stocks, may set a record high next week, helped by good earnings from Apple Inc expected on Tuesday.

Technology shares led the U.S. stock market's recovery this week from its worst correction in four years in August, thanks to gains in Alphabet, Amazon and Microsoft, after the three companies reported better-than-expected earnings results.

The Dow Jones industrial average rose 0.9 percent to 17,646.70, the S&P 500 index recovered another 1.1 percent to 2,075.15, and the Nasdaq Composite closed the week up 2.27 percent at 5,031.86.

Shares across Asia, Europe and the Americas all climbed, boosted by Thursday's message from European Central Bank chief Mario Draghi that he was ready to increase the ECB's bond buying program, and by an interest rate cut by China's central bank.

Factors this coming week that may provide further support for U.S. stocks include a Federal Reserve policy meeting, which is not expected to raise interest rates yet, a report on U.S. third-quarter economic growth, and earnings from Apple.

The Nasdaq 100 index, including Apple, is just 1.5 percent below its year high and 4.0 percent from its record high back in March 2000.

Intel and Microsoft have seen their stocks recover more than 30 percent each since Aug. 25, while Amazon and Facebook rose 28 percent and 23 percent, respectively.

But the 'underperformer' among these companies has been Apple, up only 14.8 percent from its Aug. 25 close, less than the Nasdaq 100's 15.1 percent gain in that time.

In contrast to Microsoft, Facebook, Alphabet and Amazon, Apple shares did not post record or multi-year highs this week, even though it rose 7.2 percent, the largest weekly gain in a year.

On Tuesday, though, Apple is expected to report $51.1 billion in revenue, a 21.3 percent increase compared to the same quarter of last year. Earnings are seen at $1.879 per share.

Dollar up on strong ECB easing signal

The Australian dollar has climbed slightly higher after the European Central Bank kept interest rates on hold and flagged its readiness to step up its stimulus program.

The Aussie had a spike overnight.

At 0700 AEDT on Friday, the currency was trading at 72.13 US cents, up from 71.96 cents on Thursday.

ANZ senior FX manager Sam Tuck said the Aussie had an initial spike overnight after the ECB indicated further stimulus could be on the table at its next meeting, in December.

“But one of the key considerations for the ECB was global growth concerns, especially the risks emanating from emerging markets,” he said.

This dovetails with the US Federal Reserve’s message from September, that central banks are considering either delaying lift-off or increasing stimulus to protect their economies from risks in Asian economies, Mr Tuck said.

“It’s a developed market and a source of safety for cash but it’s also highly exposed to emerging markets.”

The European Central Bank News - ECB's Target

ECB to stay put, keep door open for more stimulus

The European Central Bank (ECB) headquarters are pictured in Frankfurt, Germany, September 3, 2015.

The European Central Bank is likely to keep the door open for more monetary stimulus but stop short of taking new policy steps at a meeting on Thursday as it awaits fresh indications about the outlook for euro zone inflation.

Consumer prices in the 19-country euro zone fell in September, prompting calls for the ECB to expand or extend its 60 billion euros ($68.09 billion) a month of asset purchases. The program was launched in March to help push inflation back to the ECB's target of just under 2 percent.

While stressing their readiness to act, the bank's policymakers have said the fall in prices is largely due to energy costs, which the ECB cannot influence, and that it is unclear whether a slowdown in emerging economies will have a lasting impact on the euro zone.

Their cautious tone suggests the ECB will wait until it gets new inflation forecasts from its staff in December before deciding on any change to its quantitative easing scheme. 

A broader debate meanwhile appears to be taking shape within the bank about whether monetary policy is already coming up against the limits of its effectiveness.

Euro zone economic growth is slowing again, with even powerhouse Germany seeing a recent string of poor data, and one of the ECB's favored gauges of inflation expectations, the five-year, five-year euro zone breakeven forward EUIL5YF5Y=R, has fallen to 1.7 percent from 1.85 percent in July.

Lending surveys have continued to improve, however, providing some ammunition for ECB President Mario Draghi to argue that QE is finding its way into the real economy and does not urgently need to be adjusted.

Draghi has said the ECB is prepared to intervene if risks to inflation increase or financing conditions tighten, and has cited the exchange rate as a key factor for price stability.

European Central Bank News

ECB shows Irish and Spaniards got poorer as Germans, Dutch prospered

A trader looks at computer screens as another one talks on his mobile phone at the Madrid stock exchange September 11, 2014.

Ireland's citizens lost more of their personal wealth than any other euro zone country in the aftermath of the financial crash while Germany and the Netherlands gained the most, fresh data from the European Central Bank shows.

In an analysis of the years between 2009 and 2013, ECB experts discovered that Ireland lost more than 18,000 euros ($20,500) per person, while Spaniards saw wealth dwindle by almost 13,000 euros as property in both nations plummeted.

Greeks saw their notional wealth decline by almost 17,000 euros for the same reason.

In the Netherlands and Germany, by contrast, the wealth per capita grew by roughly 33,000 and 19,000 respectively, due in part to a boost to financial investments over that time.

By presenting the data in this manner, the ECB acknowledges the divergence, although there is little the central bank can do to remedy it.

Its money-printing scheme known as quantitative easing is spread out according to euro zone member countries' relative size and not determined by their economic needs.

To fix imbalances between strong industrial nations such as Germany and countries such as Spain, experts have long pushed for a system of financial transfers or payments from rich to poor states.

Germany, which fears that this would lumber it with unmanageable costs and believes that handouts would discourage spendthrift countries from reforming, has flatly rejected the suggestion.