(Bloomberg) — Stocks rose, with Europe’s Stoxx 600 bouncing back from a 10-month low, and oil prices retreated as Israel’s military action in Gaza proceeded more cautiously than some investors had feared.
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Europe’s Stoxx 600 and S&P 500 futures gained about 0.7%. Brent crude oil dropped to $89 a barrel and gold slipped below $2,000 an ounce. Ten-year Treasury yields edged higher to 4.86%.
Instead of a massive ground invasion, the Israeli military has started slowly and so far there are few signs that the conflict will spread across the wider Middle East region. That’s being seen as enough good news for investors to wade back into markets after last week’s sharp selloff, which sent the S&P 500 into a correction on Friday after the index closing 10% below a recent peak.
The week also includes a slew of potentially market-moving events for investors to track, including central bank meetings in Japan, the US and the UK, while the US Treasury Department announces its quarterly bond sales plan.
“The relatively contained operations over the weekend were perhaps a relief to markets, who are worried about other players being dragged into the conflict,” said James Rossiter, global head of macro strategy at TD Securities. “That should bode well for some risk assets. That said, there are definitely a few risk events for markets to chew on this week.”
The shekel took a pause from recent selling, gaining 0.4% at 4.0566. It remains the world’s worst-performing currency this month, recently hitting 11-year lows.
Shekel Gains After 5-Week Selloff as Gaza War Enters New Phase
Concern that central banks’ “higher-for-longer” interest-rate policies may tip the global economy toward a recession has wiped $12 trillion off the global stock market’s value since the end of July.
Government bonds have also tumbled, with 10-year Treasury yields hitting a 16-year high last week, despite signals from policy makers they’re “at or near” the end of rate hikes.
Wednesday’s Treasury Department bond sales announcement is shaping up to be a bigger market event than the Federal Reserve’s interest-rate decision the same day. The so-called quarterly refunding announcement will reveal the extent to which the Treasury will ramp up sales of longer-term debt to fund a widening budget deficit.
The Big Bond Market Event Wednesday Is at Treasury, Not the Fed
Bond yields remain high even after the outbreak of the Israel-Hamas war three weeks ago – the kind of geopolitical flashpoint that can spur haven demand for Treasuries. On Monday, the Treasury will set the stage for its issuance plans with an update of quarterly borrowing estimates, and for its cash balance.
Among individual stocks, HSBC Holdings Plc was steady after the bank’s further share buyback of as much as $3 billion offset news of a pretax profit of $7.71 billion that fell short of analyst estimates.
Key events this week include:
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China’s key financial policy gathering day, a rare closed door event led by Chinese President Xi Jinping, starts Monday
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Japan unemployment, industrial production, retail sales, Tuesday
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Bank of Japan rate decision, Tuesday
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China non-manufacturing PMI, manufacturing PMI, Tuesday
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Eurozone CPI, GDP, Tuesday
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US construction spending, ISM Manufacturing, job openings, Wednesday
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US Treasury quarterly refunding announcement, Wednesday
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Federal Reserve rate decision, Wednesday
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Bank of England rate decision, Thursday
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China Caixin services PMI, Friday
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Eurozone unemployment, Friday
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US unemployment, nonfarm payrolls, Friday
Here are some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.7% as of 9:58 a.m. London time
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S&P 500 futures rose 0.6%
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Nasdaq 100 futures rose 0.8%
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Futures on the Dow Jones Industrial Average rose 0.5%
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The MSCI Asia Pacific Index fell 0.2%
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The MSCI Emerging Markets Index rose 0.4%
Currencies
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The Bloomberg Dollar Spot Index fell 0.2%
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The euro rose 0.2% to $1.0583
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The Japanese yen was little changed at 149.61 per dollar
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The offshore yuan rose 0.1% to 7.3260 per dollar
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The British pound was little changed at $1.2130
Cryptocurrencies
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Bitcoin was little changed at $34,559.57
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Ether rose 1.2% to $1,818.71
Bonds
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The yield on 10-year Treasuries advanced three basis points to 4.86%
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Germany’s 10-year yield declined three basis points to 2.80%
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Britain’s 10-year yield was little changed at 4.55%
Commodities
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Brent crude fell 1.4% to $89.19 a barrel
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Spot gold fell 0.5% to $1,996.97 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess, Robert Brand and Macarena Muñoz.
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