Stocks Trim Weekly Advance as Oil Slides; Industrial Metals Rise

Stocks in Europe and Asia trimmed weekly gains as oil fell for the first time in three days, denting optimism that this year’s rout in commodities was easing.

A global equities gauge fell for the first time in six days, bringing to an end a rally fueled by the first signs that producers may consider steps to rein in a record crude glut. Friday’s drop in energy prices dragged the Bloomberg Commodity Index lower even as industrial metals rose.

Britain’s pound declined as David Cameron negotiated with European Union leaders over the U.K.’s membership of the bloc, while bonds across the continent rose. The yen strengthened against all of its 31 major peers, with the biggest gains coming versus Asian currencies.

“It’s a bumpy stabilization on oil, currency, spreads and equities,” said Didier Duret, who oversees about $219 billion as chief investment officer of ABN Amro Bank NV’s wealth-management unit. “The tail of energy has moved the psychology of the market.”

Commodities were left little changed on the week after Saudi Arabia and Russia, the world’s two largest oil-producing countries, agreed Tuesday to freeze output at near-record levels and Iran said it would support the measure without pledging its own cuts.

While that’s helping to calm financial markets, Capital Group Cos., the money manager with $1.4 trillion in assets, expects volatility to remain elevated amid a slowing global economy and uncertainty about central bank policies.

The Stoxx Europe 600 Index slid 0.5 percent, after rising as much as 0.3 percent. While the equity benchmark was set for a 4.7 percent gain this week, it’s still down more than 10 percent this year amid concerns ranging from global growth and the deepening oil slump, to the creditworthiness of lenders and dissipating faith in central-bank support.

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

Europe Futures Rise With Asian Stocks as Oil Jumps; Bonds Slide

European equity-index futures rose and Asian stocks headed for the biggest two-day gain in four years, extending a global rally in riskier assets on speculation that governments will act to boost economic growth and shore up the oil market.

Chinese shares led the advance in Asia after data showed a record surge in new credit last month, fueling bets that state-run banks will step up lending to revive the world’s second-largest economy. 

Futures on the Euro Stoxx 50 Index and Standard & Poor’s 500 Index both climbed at least 0.2 percent, while U.S. Treasuries fell as trading resumed after a holiday on Monday. Crude futures jumped as much as 4.6 percent in London after Saudi Arabia’s oil minister was said to plan a meeting with his Russian counterpart in Doha.

The 43 percent tumble in crude over the past year has restrained growth in oil-rich emerging countries and heightened sensitivity to any sign of willingness by Saudi Arabia, the de facto OPEC leader, to discuss coordinated production cuts. 

China’s lending data followed an expression of confidence in the economy from central bank Governor Zhou Xiaochuan over the weekend and reassurances from European Central Bank President Mario Draghi on Monday that policy makers will act should financial turmoil threaten price stability.

“Central banks will try to calm the markets down a little bit, and then investors will start to step back in,” said Sean Fenton, a Sydney-based money manager at Tribeca Investment Partners. “There’s enough value starting to emerge in certain areas that investors will eventually take advantage of that.”

Europe Shares Rise While Asian Stocks Drop as Yen Gains With Oil

European equities rose while Japanese stocks led shares in Asia lower as persistent concern over market volatility helped strengthen the yen. Oil climbed back above $28 a barrel before an update on U.S. stockpiles.

The Stoxx Europe 600 Index snapped a seven-day decline while Japan’s Topix index slid to its lowest since October 2014 as a gauge of the nation’s equity volatility soared. The Straits Times Index in Singapore sank the most in three weeks while the yen strengthened a third day and gold resumed its advance. 

U.S. index futures erased gains as Vermont Senator Bernie Sanders defeated Hillary Clinton in the New Hampshire Democratic Primary, while Donald Trump prevailed over a crowded Republican field.

With equity markets reeling amid concern over the creditworthiness of European banks and the impact of oil’s decline, investors will be firmly focused on Federal Reserve Chair Janet Yellen Wednesday, as she testifies before the U.S. Congress. 

After the Bank of Japan’s surprise move into negative interest rates largely failed to assuage market jitters, she will need to calibrate her commentary carefully to avoid further fueling volatility.

Russ Koesterich, global chief investment strategist for New York-based BlackRock Inc., told Bloomberg TV. “People are getting worried about the global recession, worried about growth, which is affecting not only oil and stocks but other risky assets as well.”

Treasuries are off to their best start to a year since 1988 amid demand for safe investments, and gold is near a seven-month high. While markets in Singapore and Malaysia returned from Lunar New Year holidays Wednesday, mainland China, Hong Kong, Taiwan, South Korea and Vietnam remained closed.

Europe Shares Fluctuate as Investors Look to Earnings, Jobs Data

A measure of commodity producers posted the worst performance of the 19 industry groups on the Stoxx Europe 600 Index, with Rio Tinto Group and Glencore Plc weighing heaviest after yesterday’s rebound.

The Stoxx 600 fell less than 0.1 percent to 328.63 at 9:11 a.m. in London, after swinging between losses of as much as 0.6 percent and a gain of 0.5 percent.

The equity gauge is heading for a 4.1 percent weekly decline. It is trading at about 14.4 times estimated earnings, almost 10 percent below the valuation for the Standard & Poor’s 500 Index.

Amid volatile trading, the European equity benchmark closed down yesterday as sliding automakers and Credit Suisse Group AG outweighed gains in commodity producers.

A gauge tracking equity swings has jumped 32 percent this year as the Stoxx 600 has lost about 10 percent, with concern about bad loans at banks adding to worries about an oil rout and China’s economy.

Investors will look to a U.S. report on January employment today for indications of the sturdiness of the American economy and the trajectory of interest rates in the wake of the turmoil. Economists forecast a 190,000 gain in nonfarm payrolls with unemployment holding at 5 percent.

Among stocks moving on corporate news, ArcelorMittal lost 5.1 percent after announcing plans to raise $3 billion from investors and sell a $1 billion stake in Spanish auto-parts maker Gestamp in a bid to ride out an industry slump caused by record Chinese exports.

BNP Paribas SA rose 4.7 percent after announcing a revamp of its investment bank to boost profit and free up capital, even as it posted a worse-than-estimated 52 percent decline in fourth-quarter earnings.

Volvo AB gained 1.8 percent after the second-biggest truckmaker reported fourth-quarter earnings of 5.38 billion kronor ($640 million), compared with a loss of 1.43 billion kronor a year earlier.

European Index Futures Rally With Asian Stocks as Crude Advances

European stock-index futures climbed with Asian stocks as a selloff in the dollar underpinned a resurgence in crude oil.

A gauge of Asian shares rose for the first time in three days, led by mining and energy companies, while U.S. index futures advanced.

The euro weakened 0.2 percent after surging 1.7 percent on Wednesday, when the dollar tumbled against a basket of currencies. South Korea’s won rallied the most in three months. U.S. oil extended gains above $32 a barrel after jumping 8 percent in the previous session.

"The selloff in the U.S. dollar is supportive of commodities,” said Scott Schuberg, chief executive officer at Rivkin Securities, a brokerage in Sydney.

The dollar’s retreat was sparked by data showing the U.S. services sector grew at the slowest pace in nearly two years, underscoring the vulnerability of the American economy to unsteadiness abroad.

The report tipped the fixed-income market’s balance closer toward zero rate hikes by the Federal Reserve this year, amid prospects central banks from Asia to Europe will act to quell the turmoil that’s roiled markets in 2016.

The greenback’s drop helped boost the price of crude oil, along with speculation OPEC and other oil producing nations have agreed to an emergency meeting on market volatility.

China set a range for its economic growth target for the first time in 20 years, saying late Wednesday that the economy would likely expand 6.5 percent to 7 percent this year, slower than last year’s goal of about 7 percent.

Gyrations in Chinese equity and currency markets unsettled global trading at the start of the year, with regulators’ response to the volatility fueling anxiety over their ability to manage the slowing economy.

Credit Suisse Group AG swung to a loss in the fourth quarter as it wrote off billions of dollars in goodwill, set aside provisions for litigation and booked a multi-billion-dollar loss in its main trading unit.

The bank gave up 5.83 billion Swiss francs ($5.8 billion), including a 3.8 billion-franc impairment that exacerbated its quarterly loss.

Europe Stocks Fall Amid Earnings With Oil Near $30; Ruble Gains

Stocks fell in Europe and Asia as earnings from Swatch Group AG to Nomura Holdings Inc. missed estimates and investors weighed the outlook for oil prices after a slide below $30 a barrel.

Europe’s benchmark equity gauge slumped for a third day, while Japan’s Topix index sank the most in two weeks on a 10 percent plunge in Nomura. U.S. stock-index futures were little changed. Oil steadied after its biggest two-day drop in almost seven years, buoying Russia’s ruble.

U.S. crude’s 43 percent retreat over the past year has weighed on growth in oil-rich emerging economies, fueled speculation of defaults by commodity producers and battered earnings at corporate giants from BP Plc to Exxon Mobil Corp. 

Nomura postponed a target for making its overseas operations profitable and Swatch Group said sales declined for the first time in six years, adding to signs that business conditions are deteriorating beyond the commodities sector.

The Stoxx Europe 600 Index dropped 0.7 percent at 8:19 a.m. in London, while the MSCI Asia Pacific Index retreated 2.3 percent. Futures on the Standard & Poor’s 500 Index rose less than 0.1 percent.

Swatch Group slumped 3.6 percent after the maker of Tissot and Omega timepieces reported 2015 earnings that missed analyst projections. 

Novo Nordisk A/S, the world’s largest maker of insulin, dropped 4.9 percent as fourth-quarter profit trailed estimates. Nomura, Kobe Steel Ltd., Casio Computer Co. and IHI Corp. all tumbled more than 10 percent in Tokyo trading after their results disappointed investors.

Europe Futures Slip With Asia Stocks as Oil Retreats; Yen Rises

Equity-index futures fell with Asian stocks as oil extended this week’s slump. Malaysia’s ringgit weakened, while the yen gained.

Material and energy companies were the biggest decliners on Asia’s benchmark equity gauge as U.S. oil dropped as much as 2.6 percent. Malaysia’s ringgit led a retreat in high-yielding currencies. 

Standard & Poor’s 500 Index futures slipped, while Treasuries advanced. Senator Ted Cruz won the Iowa Republican caucuses in an upset over billionaire Donald Trump, while Democrat Hillary Clinton was clinging to the narrowest edge over Senator Bernie Sanders of Vermont.

Oil has erased last week’s rally as speculation U.S. stockpiles are continuing to expand reinforces concern over the global glut. The link between equity markets and crude had eased briefly as Federal Reserve Vice Chairman Stanley Fischer said the impact on the U.S. of recent market turbulence could factor into decision-making. 

The comments came in the wake of signals from central banks in Europe and Japan that they are ready to do what is needed to spur growth and after factory data underscored anxiety over China’s economy.

India joined Australia in keeping benchmark rates unchanged Tuesday. South Korean consumer prices were flat in January from the previous month, after economists projected a 0.4 percent increase, data showed.

Draghi's Shield Under Attack as Politics Exposes European Risks

Mario Draghi may be the euro region’s great protector, but investors can still get hurt.

From Portuguese government bonds to Italian bank stocks, the most stressed parts of the euro region are providing a reminder that the European Central Bank president’s stimulus and safety-net programs don’t bring immunity from losses. It’s an alarm that could prove timely if a series of political risks from Spain to Greece materialize.

With the ECB’s crisis-busting Outright Monetary Transactions program unveiled in 2012 and the quantitative-easing plan since last March, markets were mostly anesthetized to politics until now. While they look nothing like they did during the meltdown five years ago, investors wondering when the drugs would start to wear off may have their answer.

In reality, the countries that characterized Europe’s sovereign debt crisis from 2010 to 2012 never went away as potential sources of turmoil for financial markets.  

There was the arrival of a government in Portugal antagonistic to the reforms of its predecessor, the potential for a similar one in Spain and the looming threat that Greece’s rescue program will unravel. The simmering refugee crisis also has the potential to crack the consensus underpinning the European Union. All this, when the global economic hinterland even has Apple Inc.

China Stocks Drop With European Equity Futures; Crude Oil Falls

China’s stocks fell as concern slumping commodity prices and a weakening economy will reduce profits overshadowed the biggest cash injection into financial markets in three years. 

European stock index futures fell and oil led a retreat in raw materials, while South Korea’s won weakened.

The Shanghai Composite Index fell 2.9 percent and contracts on the Euro Stoxx 50 Index retreated 0.4 percent while Japanese shares declined as the nation’s central bank started a two-day meeting. Facebook Inc.’s after-market bounce spurred gains in futures on the Nasdaq 100 Index. 

U.S. crude snapped a two-day advance as American stockpiles data reinforced concern a global glut is worsening. Malaysia’s ringgit rose to a seven-week high after Prime Minister Najib Razak maintained his fiscal-deficit target.

With 2016 proving to be one of the most volatile starts to a year on record for financial markets, the Fed’s first statement since its December interest-rate hike noted officials were “closely monitoring” developments from China to Europe, for any adverse impact on the U.S. economy. 

China’s policy makers injected more cash into its financial system to keep borrowing costs from rising as they contend with the slowest economic growth in a quarter century and record capital outflows that drove the yuan to a five-year low this month.

European shares lose ground as Novartis and BASF fall

European shares lost ground on Wednesday, impacted by a drop in Swiss drugmaker Novartis and German chemicals company BASF after their weak earnings updates.

Royal Bank of Scotland also fell more than 2 percent after the bank warned its profits would be hit by a pension charge and U.S. litigation provisions, while a forecast of lower revenues from Apple impacted technology stocks.

The pan-European FTSEurofirst 300 index was down by 0.6 percent, while the euro zone's blue-chip Euro STOXX 50 index fell 0.8 percent.

Novartis fell 2.7 percent after its fourth-quarter core net income missed analyst expectations, while BASF weakened by 2.9 percent after issuing a profit warning.

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.

Asia stocks lows, helped by ECB, oil bounce

The euro slipped 0.4 percent to $1.0832 EUR=. The common currency fell to an eight-month low of $1.0523 in December but has appreciated significantly because the ECB's easing decision that month fell far short of expectations.

The dollar was up 0.3 percent at 118.03 yen JPY=, pulling away from a one-year trough of 115.97 struck earlier this week against the safe-haven Japanese currency.

The Chinese yuan remained relatively steady against the dollar as efforts by local authorities to quell speculation of a sharp depreciation appeared to work for now.

Onshore spot yuan CNY=CFXS stood little changed at 6.5794 to the dollar, corralled in a narrow 6.5837-6.5768 band so far this week.

After guiding the yuan sharply lower and pushing onshore spot rates to a five-year low earlier this month, the People's Bank of China (PBOC) has helped the currency steady by setting a succession of midpoints within a tight range.

Authorities have also introduced steps to discourage speculators from shorting the yuan.

U.S. crude oil CLc1 extended an overnight rally made after data showed stockpiles at some U.S. sites did not grow as much as forecast, providing participants in the battered market with an incentive to cover short positions.

The contracts were up 1.2 percent at $30.71 a barrel. U.S. crude fell to its lowest levels since 2003 earlier this week as the prospect of Iranian oil - following the lifting of international sanctions on Tehran - flooding a heavily saturated market dragged down prices.

European stock markets drop as oil price slides

Jan 20 European stocks dropped on Wednesday as a relentless slide in oil prices hit world markets.

The pan-European FTSEurofirst 300 index fell 2.3 percent to a 13-month low. Britain's FTSE 100 fell 1.9 percent, Germany's DAX slid 2.3 percent while France's CAC retreated by 2.2 percent.

Oil prices lost yet more ground, with U.S. crude dropping towards $27 a barrel, after the International Energy Agency, which advises industrialised countries on energy policy, warned that oil markets could "drown in oversupply" in 2016.

Shares of European oil and energy companies were among the worst performers, with Norwegian offshore driller Seadrill slumping 11.6 percent while Tullow Oil fell 6.7 percent.

"I am quite pessimistic about the equity markets for the next two to three months. I do not see a 2008-style scenario, but I do see a bear market coming," said Andreas Clenow, hedge fund trader and principal at ACIES Asset Management.

Euro zone inflation confirmed at 0.2 percent in December

Euro zone inflation was confirmed at 0.2 percent in December, the European Union's statistics office data showed on Tuesday, with prices going up in restaurants and cafes and falling the most for fuel.

Eurostat confirmed its earlier estimate that consumer prices in the 19 countries sharing the euro were flat month-on-month in December for a 0.2 percent year-on-year rise.

However, the statistics office revised down the inflation number for November to 0.1 percent year-on-year from 0.2 percent reported earlier.

Excluding the volatile prices of unprocessed food and fuel, or what the European Central Bank calls core inflation, prices in December grew 0.3 percent month-on-month and 0.9 percent year-on-year, the annual change the same as in November.

The ECB wants to keep inflation below, but close to 2 percent over the medium term. To accelerate price growth the bank last year launched a government bond buying program to flood the market with cash and boost demand.

The biggest downward pull on the index came from prices of fuel for transport, which subtracted 0.4 percentage points.

The price of a barrel of Brent crude has fallen further in January, slumping on Tuesday to below $28 per barrel, its lowest level since 2003, as the market anticipated a rise in Iranian exports after the lifting of sanctions against Tehran over the weekend.

European shares slip as worries over China linger

European shares inched down towards their lowest level in more than three months on Monday as doubts grew about Beijing's ability to manage the world's second-biggest economy.

The pan-European FTSEurofirst 300 index fell 0.1 percent, near its lowest level since late September. Britain's FTSE 100 declined 0.4 percent while Germany's DAX weakened by 0.3 percent.

China let its yuan currency strengthen for a second straight session on Monday, in a move that might calm concerns about how ready Beijing is to let the currency depreciate.

However, the development added to doubts over Beijing's ultimate policy intent, and it failed to stop investors selling Chinese shares.

Figures out over the weekend also showed Chinese consumer inflation stuck at a subdued 1.6 percent in December, while producer prices were down a steep 5.9 percent on the year - a deflationary pulse that is being felt across the globe.

Euro falls as investors' appetite for risk stabilizes

The euro fell towards a one-month low against the dollar on Tuesday, as risk appetite stabilized following a volatile Monday when weak Chinese data and a breakdown in relations between Saudi Arabia and Iran prompted a stock market sell-off. 

The dollar had hit an 11-week low against the Japanese currency JPY= on the first trading day of the year as Chinese share prices slid and traders ran for the traditional security of the yen and the Swiss franc.

But world stocks inched off 2-1/2 month lows on Tuesday as China pumped in an estimated $20 billion to stabilize local equity and currency markets, and the dollar was off its lows against the yen.

European bourses meanwhile opened higher after the previous day's steep losses.  Against the yen, the euro fell 0.7 percent to an eight-month low of 128.55 yen EURJPY=.

The euro fell 0.3 percent to $1.0795 EUR=. It has tended recently to perform well at times of market uncertainty as investors who had held euro-funded carry positions, in which the a low-yielding currency is borrowed and then sold in favor of a riskier higher-yielding one, have bought back euros.

Traders will be watching euro zone flash inflation data due at 1000 GMT, following weaker-than-expected German and Spanish inflation numbers on Monday.

Analysts at Commerzbank said an argument could be made for further rate cuts if the data missed forecasts for a 0.3 percent annual pick-up, prompting the European Central Bank to again lower its inflation projections.

Shanghai shares managed to limp up 0.2 percent on Tuesday after Chinese regulators said they may restrict stock sales by major shareholders.

European Stock Market News - ECB's Monetary Easing

In currencies, the euro slipped 0.1 percent to fetch $1.1010 EUR= after climbing a to one-month peak of $1.1044 overnight.

The common currency, already on a bullish footing after the ECB's monetary easing last week fell well short of expectations, received a further boost after Governing Council member Ewald Nowotny suggested on Wednesday the markets were expecting too much stimulus from the central bank.

A notable mover in Asia was the Australian dollar, which soared after a report showed Australian jobs surged by 71,400 in November, pushing the unemployment rate to a 19-month low of 5.8 percent. That followed strong gains in October, making this the strongest two-month total in 28 years.

Despite questions about the reliability of the data, the Aussie jumped 0.9 percent to $0.7300.

The New Zealand dollar also advanced after the Reserve Bank of New Zealand (RBNZ) cut interest rates early on Thursday but said further easing should not be needed.

The kiwi traded at $0.6730 NZD=D4 after gaining more than one percent in response to the central bank's statement.

The Euro Traded

The euro traded at $1.0581 EUR=, down 0.1 percent on Monday and 3.8 percent on the month, edging near a seven-month low of $1.0565 touched on Wednesday.

The prospects of an ECB easing also is putting pressure on the central bank of Switzerland, surrounded by euro zone countries, to take similar actions to stem any strengthening in the Swiss franc.

That pushed the franc to a five-year low of 1.0328 franc to the dollar on Friday. It last stood at 1.0316. CHF=.

In contrast, the dollar is supported as the Federal Reserve is widely tipped to hike U.S. interest rates at its mid-December policy meeting. The dollar index =USD .DXY rose to an eight-month high of 100.23.

The yen stood little changed at 122.73 yen JPY=, largely shrugging off data showing Japan's industrial output rose slightly less than expected in October.

European stocks retreat at open

Europe's main stock markets opened lower on Friday, with London's benchmark FTSE 100 index down 0.6% at 6 357.42 points.

In the eurozone, Frankfurt's DAX 30 dipped 0.4% to 11 277.91 points and the Paris CAC 40 lost 0.6% to 4 919.01 compared with Thursday's closing level.