(Bloomberg) — Stocks advanced and Treasuries steadied at the end of a blistering November run as investors waited for a key US inflation metric for further evidence that price pressure are cooling.
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Europe’s Stoxx 600 index added 0.5%, set for its best month since January, and US futures advanced. Salesforce Inc shares jumped as much as 9% in premarket trading after the application software firm’s results and profit forecasts beat estimates.
Treasuries paused their strongest monthly gain since 2008, with yields on 10-year paper up four basis points at 4.30%. The dollar bounced 0.3% at the end of its worst month in a year, sending all major developed- and emerging-market currencies lower. The euro traded down 0.4% versus the greenback as the pace of price growth in the region cooled.
Easing inflation and signs of a milder-than-expected slowdown in the US economy have sent Treasuries, agency and mortgage debt to their best month since the 1980s — triggering a November surge that pulled along assets from stocks to credit to emerging markets.
Data due Thursday is forecast to show the Fed’s preferred inflation metric — the personal consumption expenditures price index — decelerated in October to the slowest annual rate since early 2021.
“Momentum on the other side of the pond is likely to remain bullish rates,” wrote Evelyne Gomez-Liechti, a multi-asset strategist at Mizuho International Plc in London. “The PCE inflation data for October is most likely going to echo what we already saw in the October CPI and PPI reports and add to the soft-landing narrative.”
Now, traders are looking to a speech by Fed Chair Jerome Powell on Friday.
“Upcoming Fed communication could continue to stress the need hold rates steady for some time,” said Hauke Siemssen, rates strategist at Commerzbank AG. “We expect the air to be getting thinner for further bond market performance ahead of the usual supply wave early next year.”
Euro Pain
In Europe, the euro sank after weak French economic data and a Euro-zone inflation print that came in lower than the estimates of all economists in a Bloomberg poll.
Markets now show a quarter-point reduction in European Central Bank rates is fully priced by April, even after policymakers warned that borrowing costs will remain elevated for an extended period.
Elsewhere, oil rose for a third day as traders count down to a key meeting that will see OPEC+ set output policy into the new year. The group is discussing additional output cuts of about 1 million barrels a day as it seeks to overcome internal disagreements and shore up flagging crude prices.
Key events this week:
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OPEC+ meeting, Thursday
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Eurozone CPI, unemployment, Thursday
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US personal income, PCE deflator, initial jobless claims, pending home sales, Thursday
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China Caixin Manufacturing PMI, Friday
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Eurozone S&P Global Manufacturing PMI, Friday
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US construction spending, ISM Manufacturing, Friday
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Fed Chair Jerome Powell to participate in “fireside chat” in Atlanta, Friday
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Chicago Fed President Austan Goolsbee speaks, Friday
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 rose 0.5% as of 12:36 p.m. London time
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S&P 500 futures rose 0.3%
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Nasdaq 100 futures rose 0.3%
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Futures on the Dow Jones Industrial Average rose 0.5%
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The MSCI Asia Pacific Index rose 0.3%
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The MSCI Emerging Markets Index rose 0.2%
Currencies
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The Bloomberg Dollar Spot Index rose 0.3%
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The euro fell 0.4% to $1.0923
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The Japanese yen fell 0.2% to 147.56 per dollar
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The offshore yuan was little changed at 7.1459 per dollar
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The British pound fell 0.3% to $1.2656
Cryptocurrencies
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Bitcoin rose 0.3% to $37,856.54
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Ether rose 0.7% to $2,044.12
Bonds
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The yield on 10-year Treasuries advanced four basis points to 4.29%
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Germany’s 10-year yield was little changed at 2.44%
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Britain’s 10-year yield advanced four basis points to 4.14%
Commodities
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Brent crude rose 0.9% to $83.87 a barrel
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Spot gold fell 0.3% to $2,038.43 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Liau Y-Sing and Chiranjivi Chakraborty.
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Read More: Stocks Gain Before US Inflation Data; Euro Sinks: Markets Wrap