European stocks rose with most Asian shares as investors braced themselves for one of the busiest weeks of the year, during which three of the world’s major central banks will set interest rates, President Donald Trump will meet North Korea’s leader and Brexit will return to the fore.
The mood was cautiously risk-on, with the Stoxx Europe 600 Index rising for the first time in five days as contracts for the S&P 500 traded sideways and Treasuries fell with core European bonds. Earlier in Asia, shares in Japan, Hong Kong and South Korea showed modest advances while China stocks underperformed. Australia’s markets were shut for a holiday. Canada’s dollar fell in the wake of the G-7 meeting, which ended with deepening tensions over U.S. tariffs and saw a dispute erupt between Trump and Prime Minister Justin Trudeau. The euro rose and Italian bonds jumped after the country’s new finance minister confirmed his commitment to the common currency.
Investor are steeling themselves for more geopolitics to kick off the week, with Trump saying he feels “very good” about Tuesday’s summit with Kim Jong Un. After that they will switch their focus to the views of the world’s central banks. The Federal Reserve is expected to raise interest rates Wednesday, while European Central Bank officials are poised to hold the first formal talks on ending its bond-buying program Thursday. The Bank of Japan meets Friday, with no change to policy expected.
“The week seems to be starting in risk-friendly, G-7-ignoring mood,” Kit Juckes, a global strategist at Societe Generale SA, wrote in a note. “Maybe the Fed can hike dovishly not to worry markets, maybe we’ll see a temporary easing of euro-tensions let the currency trundle around in a range for a bit, but I’m not in the least inclined to be lulled into a false sense of security. Monday morning trades tell us little.”
Elsewhere, West Texas oil fell in the wake of news that the number of rigs drilling for crude in the U.S. inched up and Russia boosted production. Bitcoin traded near a two-month low following a hacking incident at South Korean cryptocurrency exchange Coinrail.
Terminal users can read more in Bloomberg’s Markets Live blog.
These are some key events to watch this week:
- President Donald Trump and North Korean leader Kim Jong Un meet for an historic summit in Singapore Tuesday
- U.K. Prime Minister Theresa May faces votes that could derail her Brexit policy, also Tuesday
- Federal Reserve is expected to raise interest rates Wednesday as the U.S. economy remains solid
- European Central Bank rates decision Thursday and briefing with President Mario Draghi
- Bank of Japan June monetary policy decision and news conference Friday
- FIFA expects more than three billion viewers for the World Cup that begins this week in Russia.
These are the main moves in markets:
- The Stoxx Europe 600 Index gained 0.4 percent as of 8:04 a.m. London time, the largest rise in more than a week.
- The MSCI World Index of developed countries increased 0.2 percent to the highest in almost three months.
- The MSCI Asia Pacific Index climbed 0.1 percent.
- Japan’s Nikkei 225 Stock Average gained 0.5 percent.
- The MSCI Emerging Market Index advanced 0.5 percent, the largest gain in a week.
- The U.K.’s FTSE 100 Index gained 0.3 percent.
- Futures on the S&P 500 Index advanced less than 0.05 percent.
- The Bloomberg Dollar Spot Index climbed less than 0.05 percent.
- The euro increased 0.3 percent to $1.1806, the strongest in almost four weeks.
- The British pound climbed 0.2 percent to $1.3432, the strongest in more than three weeks.
- The Japanese yen declined 0.4 percent to 110.02 per dollar, the largest drop in more than a week.
- The yield on 10-year Treasuries advanced two basis points to 2.96 percent.
- Germany’s 10-year yield climbed three basis points to 0.48 percent.
- Britain’s 10-year yield increased three basis points to 1.388 percent, the highest in almost three weeks.
- West Texas Intermediate crude decreased 0.4 percent to $65.48 a barrel.
- Gold declined 0.1 percent to $1,297.43 an ounce, the biggest drop in more than a week.