(Bloomberg) — U.S. equity futures advanced on Friday after solid economic data and President Joe Biden’s federal spending plans spurred a Wall Street rally in cyclical shares. Treasuries were steady and the dollar strengthened.
The Stoxx Europe 600 index reached a fresh record high, boosted by expectations that the European Central Bank won’t hit the brake on stimulus measures next month. Insurers led the advance after the U.K.’s financial regulator provided clarity on new measures to bolster competition. Contracts on all three major U.S. indexes signaled gains when trading opens.
U.S. data included a drop in jobless claims to a fresh pandemic low. Biden is reportedly set to unveil a budget that would take federal spending to $6 trillion in the coming fiscal year. Investors will watch data on personal spending and the Federal Reserve’s preferred inflation measure later Thursday for further clues on the outlook for prices.
The 10-year U.S. Treasury yield hovered held above 1.60% amid growth optimism and concerns of more debt supply to fund spending. The yen fell as Japan recommended extending a state of emergency that includes Tokyo to curb infections. China signaled the yuan’s recent appreciation is too rapid, with a weaker-than-expected reference rate.
Global stocks are set to climb for a fourth month, supported by the economic rebound from Covid-19. Comments from Federal Reserve officials have helped temper fears that inflation could spark a faster-than-expected reduction in stimulus. Treasury Secretary Janet Yellen said she sees the burst in prices as temporary, though likely to last through the end of 2021.
“Between now and year end, we see a little more room for stocks to move up from where they are today and the highs they already achieved earlier this year,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets LLC, wrote in a note. “But we don’t think that the path to get there will be smooth and think a short-term pullback before the year is up remains likely.”
Elsewhere, oil hovered around a two-year peak but gold retreated. Bitcoin slipped toward the $35,000 level. Copper and iron ore gained as optimism about the U.S. spending plan offset concern about China’s efforts to curb price increases. The Turkish lira sank to a record low amid concern that monetary policy remains too loose to contain accelerating inflation.
For more market commentary, see the MLIV blog.
These are some of the main moves in markets:
The Stoxx Europe 600 rose 0.4% as of 11:12 a.m. London timeFutures on the S&P 500 rose 0.4%Futures on the Nasdaq 100 rose 0.3%Futures on the Dow Jones Industrial Average rose 0.5%The MSCI Asia Pacific Index rose 0.8%The MSCI Emerging Markets Index rose 0.3%
The Bloomberg Dollar Spot Index rose 0.1%The euro was little changed at $1.2187The Japanese yen was little changed at 109.87 per dollarThe offshore yuan rose 0.1% to 6.3642 per dollarThe British pound fell 0.2% to $1.4182
The yield on 10-year Treasuries was little changed at 1.61%Germany’s 10-year yield was little changed at -0.17%Britain’s 10-year yield was little changed at 0.82%
Brent crude rose 0.2% to $70 a barrelSpot gold fell 0.2% to $1,893 an ounce
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