S&P 500 futures added 1% and Nasdaq futures added 1.4%.
US-listed shares of Chinese home delivery company Didi Global surged 50% ahead of the market after the Wall Bourse Journal reported that Chinese regulators are preparing to allow mobile apps to return to retail stores.
The news helped Hong Kong’s Hang Seng Technology Index close 4.6%. In Europe, stocks were stronger at the open, with the STOXX 600 up 0.9%.
The return to riskier assets came ahead of central bank meetings that investors hope will bring clarity to curbing inflation and slowing growth.
The European Central Bank meets on Thursday, although it is not expected to start raising interest rates until July. Rate-setters from the US Federal Reserve and the Bank of England will meet next week.
“There are still some doubts as to whether inflation has peaked or not,” said Michael Hewson, chief market analyst at CMC Markets.
“We are now in the neutral zone in terms of peak inflation, as well as the reopening of China and possible tailwinds that may arise. Oil prices are still a headwind, so it’s hard to move in either direction. Hewson said.
The MSCI All Country Equity Index added 0.3%, while its recent bounce from near-bear territory remained largely untouched.
Shares in London’s blue chips rose 1.2%, as did the pound, on news that British Prime Minister Boris Johnson will face a vote of confidence from lawmakers from his ruling Conservative Party on Monday.
Oil prices strengthened after Saudi Arabia sharply raised the price of its crude in July, signaling a supply shortage, even after OPEC+ agreed to accelerate oil price increases over the next two months. [O/R]
Brent rose 0.2% to $120.02 a barrel. US oil rose 0.2% to $119.14 per barrel.
Gregory Perdon, co-head of investment at Arbuthnot Latham, said investors need to balance bearish factors such as inflation, rising rates, the war in Ukraine and a rising dollar with still loose monetary policy, a good, albeit slower, economic growth and Chinese incentives. measures.
“Overall, I think risking in this environment will be more beneficial than betting against risky assets,” Perdon said.
“We’ve had seven of eight weeks of negative S&P 500 and this is probably a decent entry point in terms of adding risk to portfolios, assuming you don’t have too much risk to start with.”
The mood was fueled by comments from US Commerce Secretary Gina Raimondo that President Joe Biden asked his team to consider removing some tariffs on Chinese imports.
CHART: US CPI (
ECB, CPI DOWN
At the ECB meeting on Thursday, President Christine Lagarde is seen as confident to confirm a halt to bond purchases this month and an initial rate hike in July, although it is not known if that will be a 25 or 50 basis point hike as some investment banks raised their expectations.
FX markets are looking for a 130 basis point rate hike by the end of the year and a 50 basis point rate hike by October in just one meeting.
The prospect of ECB rates turning positive this year has seen the euro rally to $1.0724 from its recent low of $1.0348, although it has struggled to overcome resistance around $1.0786.
The euro also hit a seven-year high against the yen at 140.39 after rising 2.9% last week, while the dollar held steady at 130.67 yen after rising 2.9% last week.
Against a basket of currencies, the dollar remained at 102, little changed on the day after gaining 0.4% last week.
After Thursday’s ECB report, markets will be watching next day’s US CPI report, especially after European inflation shocked many with a record high last week.
Forecasts suggest a sharp rise of 0.7% in May, although the annual rate remains at 8.3% and core inflation slows slightly to 5.9%.
The strong reading will only reinforce expectations of aggressive Fed tightening next week, as markets are already forecasting a half-point gain in June and July and nearly 200 basis points (bps) at the end of the year.
In commodities markets, wheat futures jumped 4% after Russia launched a missile attack on the Ukrainian capital of Kyiv, dashing hopes for progress in peace talks.
Gold was worth $1,854 an ounce, up 0.2% after staying in a tight range for the past two weeks. [GOL/]