(Bloomberg) — The euro rose on European stock index futures amid speculation that Marine Le Pen’s far-right party will struggle to win an absolute majority in French elections, dampening concerns about new tensions on the country’s public finances.
Bloomberg’s most read articles
French government bond futures edged higher, while German bond futures fell after the first round of voting showed Le Pen’s National Rally party ahead of President Emmanuel Macron’s centrist alliance, albeit less comfortably than some polls had predicted. A strong showing by her party would have increased the chances of expansionary fiscal policy in France, whose deficit already exceeds what is allowed under European Union rules.
Most Asian stocks advanced, with Japanese and South Korean indexes both rising. Chinese stocks retreated after a report showed industrial activity contracted for the second straight month in June. Although data showed the Caixin manufacturing index edged up last month, Bloomberg Economics said the marginal improvement was not enough to counter the worrying message from official surveys.
“We’re starting in Asia with this sense of relief that the far-right parties didn’t get the kind of majority that was feared,” Charu Chanana, market strategist at Saxo Capital Markets in Singapore, told Bloomberg Television’s David Ingles and Stephen English.
In addition to political horse-trading in France, investors will look to the European Central Bank for clues, she said, adding that “there has been some sense of stability for the euro zone economy after that first rate cut, but that’s certainly not the case.” Looks like we’re not out of the woods yet.
Confidence among Japan’s top industrialists strengthened on Monday, leaving the door open for the central bank to consider raising interest rates later this month. The yield on the country’s 10-year bond rose 2.5 basis points.
One in three economists surveyed by Bloomberg expects a rate hike at the upcoming rally. The yen fell to its lowest level since 1986 last week, prompting some analysts to flag a heightened risk of a rate move as Governor Kazuo Ueda pledged to closely monitor the yen’s impact on inflation.
Economical cooling
As the U.S. quarter ended Friday, a string of data showed the world’s largest economy was slowing without causing lasting damage to consumers. U.S. consumer confidence fell less than initially expected on expectations that inflation pressures would moderate and the Fed’s preferred inflation gauge posted its smallest gain in six months. Treasury bonds edged lower Monday.
“Heading into the second half, there’s a lot of election uncertainty and we think the dollar will be the best hedge against risk,” Alex Loo, foreign exchange and macro strategist at TD Securities, told Reuters. Annabelle Droulers and Shery Ahn on Bloomberg Television. . “We appreciate its appeal as a safe haven currency.”
On the commodities front, oil was little changed as traders assessed China’s economic outlook and geopolitical risks in Europe and the Middle East.
Main events of the week:
Retail sales in Australia, Monday
Tankan report from Japan, Monday
Caixin Chinese manufacturing PMI index, Monday
Eurozone S&P Global Manufacturing PMI for the Eurozone, Monday
Indonesian CPI, Monday
HSBC India manufacturing PMI, Monday
S&P Global / CIPS UK manufacturing PMI, Monday
U.S. Construction Spending, ISM Manufacturing, Monday
ECB President Christine Lagarde speaks on Monday
Bundesbank President Joachim Nagel speaks on Monday
RBA releases minutes of June policy meeting on Tuesday
South Korea CPI Tuesday
Eurozone: CPI, unemployment, Tuesday
Fed Chairman Jerome Powell speaks Tuesday
ECB President Christine Lagarde speaks on Tuesday
Caixin Chinese Services PMI, Wednesday
S&P Global Eurozone Services PMI and PPI, Wednesday
Poland rate decision on Wednesday
US FOMC Minutes, ISM Services, Factory Orders, Trade, Initial Jobless Claims, Durable Goods, Wednesday
ECB President Christine Lagarde speaks on Wednesday
New York Fed President John Williams speaks Wednesday
The Swedish central bank will publish the minutes of its June meeting on Wednesday.
Australian trade, Thursday
Trade in Brazil, Thursday
UK general election, Thursday
Interim European Union tariffs on Chinese electric vehicles expected to be introduced on Thursday
The ECB publishes the minutes of the June political meeting on Thursday
United States Independence Day, Thursday
Philippines CPI, Friday
Taiwan CPI, Friday
Thailand’s CPI, international reserves, Friday
Eurozone retail sales, Friday
France trade, industrial production, Friday
Industrial production in Germany, Friday
ECB President Christine Lagarde speaks on Friday
Unemployment in Canada, Friday
US unemployment and non-farm payrolls, Friday
New York Fed President John Williams Speaks Friday
Some of the main movements in the markets:
Actions
S&P 500 futures rose 0.3% as of 11:28 a.m. Tokyo time.
Hang Seng futures fell 0.4%
Nikkei 225 (OSE) futures rose 0.3%
Japanese Topix rose 0.5%
Australia’s S&P/ASX 200 fell 0.4%
The Shanghai Composite fell 0.1%
Euro Stoxx 50 futures rose 1%
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro rose 0.3% to $1.0750
The Japanese yen was little changed at 160.87 per dollar.
The offshore yuan was little changed at 7.2986 per dollar.
Cryptocurrencies
Bitcoin rose 2.5% to $63,475.32
Ether rose 2.4% to $3,498.07
Obligations
Raw materials
This story was produced with the help of Bloomberg Automation.
–With help from Matthew Burgess.
Bloomberg Businessweek’s Most Read Articles
©2024 Bloomberg LP
