European stocks made solid gains on Friday after the eurozone's
inflation data came in lower than expected, signalling the European
Central Bank might have reached the peak of its current tightening
Read Eurozone Inflation Cools More Than Expected in
Investors will focus on U.S. data next, as slowing inflation
should ease the risk of interest rates rising any further.
"This [U.S. PCE data] should be supportive for the Federal
Reserve being on hold," Danske Bank said, even as rates are
expected to stay higher for longer.
Stocks to Watch
Shares in Adidas and Puma rose sharply after Nike reported
quarterly results that beat Wall Street expectations. Nike's update
for the quarter ended August should benefit its European peers
given concerns about the demand backdrop in the U.S. going into the
results, Jefferies said. Read more .
Novo Nordisk's management priorities remain focused on scaling
supply-chain capacities and growing the pipeline to sustain growth
through the 2030s/40s, Citi said. Read more .
Stock futures and Treasury bonds recovered some ground ahead of
consumer-spending data and the Fed's preferred inflation gauge.
Stocks to Watch
Nike rose 8% premarket after the company on Thursday reported
Tesla was accused in a federal lawsuit Thursday of subjecting
Black employees at its California auto-assembly plant to racial
harassment and a hostile work environment. Read more . Shares rose
Follow WSJ markets coverage here
The dollar fell on month-end profit taking and as Treasury
yields retreated from high levels.
However, the currency's "underlying strength" has not been
reversed, with the DXY dollar index still trading around 106,
UniCredit Research said.
Friday's eurozone inflation plus U.S. core PCE and personal
income data could test whether investor sentiment has become less
bullish on the dollar, it said.
Very low eurozone inflation could send EUR/USD lower, especially
if U.S. data show price pressures aren't easing sufficiently, the
Crude oil prices inched higher in early trade, with the recent
rally tempered on Thursday over worries that oil had become
overbought, according to ING.
"There is likely reluctance amongst participants to push too
much higher right now with the market clearly in overbought
territory," ING said.
"There is also possible nervousness that OPEC+ and specifically
Saudi Arabia could start to ease cuts earlier than scheduled if
prices move much higher."
Base metals and gold prices rose in early trading as the dollar
eased back, but with the greenback remaining strong, BMI said it
saw little scope for a strong rise in metal prices in the coming
Competition for labor, equipment and raw materials will likely
continue lifting construction and operating costs for lithium
producers, especially while demand growth for the battery
ingredient remain high, Wood Mackenzie said.
"Development and operational risk will also likely increase over
time, as lithium is sourced from more complex deposits in higher
risk jurisdictions," while "more expensive debt and equity, and
higher disruption rates are to be expected." Read more .
Read Rising Mine Costs Seen Contributing to More Inflation-Prone
DOW JONES NEWSPLUS
Commerzbank Shares Rose After Payout Policy Revamp
Shares in Commerzbank rose on Friday after the German lender
revamped its payout policy, saying it aims for a return of at least
70% of profit for next year.
At 0741 GMT, the stock traded 8.25% higher at EUR10.52.
Lufthansa, Air France-KLM Express Interest in TAP Air
Deutsche Lufthansa and Air France-KLM have expressed interest in
TAP Air Portugal, after the Portuguese government said it plans to
sell a majority stake in its flag carrier.
The government said in a statement on Thursday that the Council
of Ministers had approved a decree to sell at least 51% of the
company, reserving up to 5% for its employees. Finance Minister
Fernando Medina said he was seeking large-scale investors, either
alone or in consortia, that would leverage TAP to grow its national
hub in Lisbon and bolster capacity at other national airports,
UK Economy Growth in 2Q Matches Previous Estimate But 1Q Figures
The U.K. economy grew in the second quarter at the same rate as
previously estimated, but upward revisions to the prior quarter's
figures indicate the economy could be withstanding some of the
pressures from high inflation and a cost-of-living crisis.
Gross domestic product expanded 0.2% from April to June compared
with the previous three-month period, the same as in preliminary
estimates, but growth in the first quarter was revised up to 0.3%
from a previously reported 0.1%, according to data from the Office
for National Statistics released Friday.
Kevin McCarthy Wins Three, Loses One in Late-Night Spending
WASHINGTON-House Republicans largely succeeded in passing a
series of annual spending bills late Thursday night, trying to show
that the often fractured conference can stay united on legislation
headed into any last-gasp negotiations with Democrats to avert a
government shutdown this weekend.
As the clock ticked toward midnight, the House passed the GOP's
annual State Department and foreign aid appropriations bill, then
the yearlong Defense Department and Homeland Security measures,
with only a handful of defections in the three votes. But the final
bill of the evening-funding the Agriculture Department-failed, with
more than two dozen Republicans joining Democrats in
Reserve Bank of Australia Set to Extend Rate Pause But Retain
SYDNEY-The Reserve Bank of Australia is widely expected to leave
its official cash rate on hold for a fourth month at its policy
meeting on Tuesday, the first to be presided over by its recently
appointed governor, Michele Bullock.
But even as the OCR is again held at 4.10%, the RBA is unlikely
to telegraph to financial markets that it is becoming relaxed about
the medium-term inflation outlook, according to economists.
Trump Says He Won't Seek to Move Georgia Case to Federal
Former President Donald Trump said in a legal filing Thursday he
wouldn't seek to move the state racketeering case against him to a
federal jurisdiction, a surprise move that would mean his Georgia
trial would likely be televised.
Trump and 18 co-defendants were charged last month by Fulton
County District Attorney Fani Willis, a Democrat, with operating a
"criminal enterprise" to overturn Trump's narrow loss in Georgia
during the 2020 presidential election. She charged the 19
defendants with being in violation of the state's racketeering, or
RICO, law; some face various other counts.
House Republicans Open Impeachment Inquiry Into Biden
WASHINGTON-With a government shutdown looming, House Republicans
held their first hearing in an impeachment inquiry into President
Biden, accusing him of lying about family members' business
dealings and condoning their trading on the Biden name.
Rep. James Comer (R., Ky.), chairman of the House Oversight
Committee, said Biden misled the American people when he said he
separated his official duties and his family's business dealings.
Comer said the president's family members, particularly his son
Hunter Biden, were selling "Joe Biden himself" as they made
millions of dollars.
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(END) Dow Jones Newswires
September 29, 2023 05:37 ET (09:37 GMT)
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