(Bloomberg) — Stocks rose with U.S. and European equity futures Thursday amid a rally in China and after gains on Wall Street in the wake of a tame inflation report. Treasury yields and the dollar were little changed.
China’s CSI 300 index rallied the most in about two months, extending a rebound as the nation’s key week-long legislative meeting concludes. Technology stocks led a wider Asian rally. Nasdaq 100 contracts outperformed and S&P 500 futures climbed after the latter benchmark rose a second day, with financial and materials shares benefiting from a rotation to value.
Ten-year Treasury yields held well below their recent one-year highs, as the market turned its attention from Wednesday’s tepid auction to the sale of 30-year debt Thursday. The dollar was flat. Crude climbed toward $65 a barrel.
Weaker-than-expected consumer price inflation data Wednesday eased concerns about the U.S. economy overheating, and helped to further stall the rising trend in bond yields. Cyclical shares continue to benefit from optimism about the recovery as the U.S. stimulus package goes into effect. Traders are also assessing the appetite to buy the recent dip in technology shares.
“It’s not inconsistent to have high yields with stocks going up if growth expectations are the driver and not inflation,” Angela Mwanza, senior vice president at UBS Wealth Management, said on Bloomberg TV. “All the indications we are getting from the central banks is exactly that, that this is good news.”
Aside from the U.S. bond auction, investors are also focused on the outlook for Europe’s recovery, with the central bank due to deliver its policy statement.
Here are some key events to watch:
The U.S. government auctions 30-year Treasuries Thursday.The European Central Bank holds its monetary policy meeting and President Christine Lagarde is set to do a briefing Thursday.
These are the main moves in markets:
Stocks
S&P 500 futures rose 0.6% as of 7:02 a.m. London. Nasdaq 100 contracts gained 1.1%. The S&P 500 index climbed 0.6%.Japan’s Topix index rose 0.3%.Australia’s S&P/ASX 200 index was flat.Hong Kong’s Hang Seng Index rose 1.2%.South Korea’s Kospi index added 1.9%.China’s CSI 300 rose 2.5%.Euro Stoxx 50 futures rose 0.3%.
Currencies
The yen was at 108.78 per dollar, down 0.4%.The offshore yuan traded at 6.5021 per dollar.The Bloomberg Dollar Spot Index was flat after sliding 0.3%.The euro was at $1.1930.
Bonds
The yield on 10-year Treasuries held at 1.52%.The yield on 10-year Australian bonds fell six basis points to 1.65%.
Commodities
West Texas Intermediate crude gained 0.5% to $64.74 a barrel.Gold rose 0.4% to $1,732.68 an ounce.
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