European Stocks Positioned to Follow Asia Higher: Markets Wrap

Index futures rose in Europe, as well as the U.S., and equities in mainland China recovered to follow gains in Sydney, Tokyo and Seoul, though volume in those three markets was below average. An index of Chinese companies trading in Hong Kong climbed the most in nearly four months. The kiwi and yen were the weakest major currencies, while the rand, Turkish lira and Mexican peso also declined. Bonds softened, extending a slump triggered by more hawkish rhetoric from central banks.

With global equities remaining near all-time highs, scrutiny turns to corporate results. PepsiCo Inc., JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. are reporting this week. Tim Moe, chief Asia-Pacific strategist at Goldman Sachs (Asia) LLC, told Bloomberg TV that his company expects U.S. earnings to be slightly above expectations. “We’re looking at about 9 percent annual earnings growth in the U.S.,” he said.

Bob Doll, senior portfolio manager and chief equity strategist at Nuveen Asset Management LLC, said improving corporate earnings are the key ingredient to sustain the equity bull market. “With economic growth prospects looking solid, we think earnings can climb,” he said.

Investors will hear from U.S. policy maker Lael Brainard on Tuesday in a speech focused on normalization of central bank balance sheets, and Federal Reserve Chair Janet Yellen’s semi-annual Monetary Policy Report to Congress is Wednesday. The Bank of Canada announces its interest-rate decision tomorrow, with a hike expected by most analysts.

These are the main moves in markets:

Currencies and bonds

The yen was down 0.4 percent at 114.45 per dollar as of 3:13 p.m. in Tokyo, declining for a third day. The Bloomberg Dollar Spot Index gained 0.1 percent. The pound was little changed and the euro lost 0.1 percent. South Africa’s rand dropped 0.5 percent to 13.56 per dollar, while the Turkish lira fell 0.3 percent and the Mexican peso was down 0.1 percent. The kiwi slid 0.6 percent to 72.31 U.S. cents. The yield on 10-year Treasuries rose one basis point to 2.39 percent. The yield on Australian government notes with a similar maturity was also up one basis point at 2.75 percent.

Stocks

Euro Stoxx 50 futures rose 0.3 percent. The underlying gauge rose 0.4 percent Monday. S&P 500 futures were up 0.1 percent and FTSE 100 futures rose 0.2 percent. Japan’s Topix Index jumped 0.7 percent. Hong Kong’s Hang Seng Index climbed 1.6 percent, heading for its first back-to-back gain in three weeks. The Hang Seng China Enterprises Index rose 2.3 percent, its biggest advance since March 16. The Shanghai Composite Index recovered from earlier losses and was up 0.3 percent.

Commodities

WTI crude strengthened 0.7 percent to $44.74 a barrel amid talks of production caps for Libya and Nigeria. Gold was down 0.2 percent at $1,211.99 an ounce. Silver slid 0.5 percent to $15.56 an ounce, approaching a 15-month low.