European stocks struggled on Wednesday, with fresh data showing eurozone business activity growing at the fastest rate in 15 years, while U.S. equity futures inched up. Shares of Pernod Ricard rose after an upbeat forecast.

Data were swinging into focus for Wednesday, with the IHS Markit flash eurozone composite purchasing managers index for June climbing to 59.2 from 57.1 in May, and marking an 180-month high. That's as economies in Europe continued to reopen and COVID-19 vaccines rolled out across the continent.

"The eurozone economy is booming at a pace not seen for 15 years as businesses report surging demand, with the upturn becoming increasingly broad-based, spreading from manufacturing to encompass more service sectors, especially consumer-facing firms," said Chris Williamson, chief business economist at IHS Markit, in a comment accompanying the data.

Among stocks on the move, shares of Pernod Ricard rose 2.7%, after the French drinks group raised its guidance for fiscal 2021, citing a stronger-than-expected recovery. Pernod is now forecasting organic growth in profit from recurring operations for fiscal 2021 of around 16%, up from previous guidance of 10%.

Vodafone shares rose 1%, after the telecoms giant said its entire European operations will be fully powered by electricity from renewable sources starting on July 1, as it aims to reach net zero carbon emissions by 2030.

On the downside, shares of French luxury-goods group LVMH Moët Hennessy Louis Vuitton fell 1.3%. Pharmaceutical giant GlaxoSmithKline was another loser, with those shares down 1.5%.

U.S. Markets:

Stock futures ticked higher signaling that the major indexes may inch toward all-time highs ahead of data on growth in the service and manufacturing sectors.

Stocks and bonds have steadied after the Federal Reserve whipsawed markets last week by signaling it might raise interest rates sooner than previously expected to ward off higher inflation. A scramble to adjust portfolios in response to that guidance has subsided, investors say. Fed Chairman Jerome Powell said Tuesday he has "a level of confidence" inflation will abate, bolstering the view that it will be many months yet before the central bank shifts its monetary policy stance.

"We should expect markets to show a heightened sensitivity to economic data from here on, now that investors have embraced the idea the monetary cycle is turning," said Paul O'Connor, head of the multiasset team at Janus Henderson Investors. "We should expect markets in the months ahead to be more volatile and more uncertain than they have been maybe over the past six months."

Surveys of purchasing managers at U.S. manufacturing and service firms are due to be released at 9:45 a.m. ET. Analysts polled by FactSet expect them to show the economy has continued to grow at a fast clip in June.

Data on sales of new homes are scheduled for 10 a.m.

Some investors have viewed the shake-up that followed the Fed's pivot as an opportunity to add to positions in value stocks and commodity markets such as copper. Sectors such as banking and energy, along with industrial metals, slid last week after benefiting from bets on higher growth and inflation for much of the year.

"There was an overreaction in bond yields and, as a second derivative of that, in bank stocks," said Matthew Quaife, heat of multiasset investment management for Asia at Fidelity International. "Growth will be pretty strong over the medium term."


The dollar was broadly steady, edging higher against the euro and yen but falling against riskier commodity-linked and emerging-market currencies after Federal Reserve Chair Jerome Powell played down inflation risks. While acknowledging short-term risks of higher inflation, he stressed Tuesday that these would be temporary.

"After the hawkish surprise from the Fed last week, this should further help to stabilize the market and translate into a supportive environment over the summer for those cyclical currencies where local central banks have opted for meaningful tightening cycles," said ING.

These include the Brazilian real, Russian ruble, Hungarian forint and Norwegian krone, it said.

Bitcoin rose 3.3% from its 5 p.m. ET Tuesday level to $33,973.61. The cryptocurrency briefly dropped below $30,000 on Tuesday, erasing all of its gains for 2021.

The euro could struggle to rise above key psychological resistance at $1.2000, said Steen Jakobsen, chief investment officer at Saxo Bank.

A level of $1.2100 or higher would be needed to indicate a reversal of the euro's recent selloff. The rebound in the euro from last week's 2.5-month low of $1.1847 "looks modest," he said.

"The growing theme of tightening central banks globally sees little anticipation that the European Central Bank is about to send any strong message on that front."


The yield on 10-year Treasury notes ticked up to 1.472% from 1.471% on Tuesday.

The U.S.-German 10-year government bond yield spread doesn't seem to be correctly pricing a disparity between central-bank support in the eurozone and the U.S., UniCredit said.

The Italian bank expects this spread to widen in the coming months to reflect the difference in central-bank support, especially once the U.S. Fed starts a formal discussion on tapering of its asset purchases.

In the near term, UniCredit expects Bund yields to remain at current levels on the back of the European Central Bank's continuing accelerated pace of asset purchases, while strong data are likely to drive 10-year U.S. Treasury yields higher and the 10-year UST-Bund spread wider.

The 10-year UST-German Bund yield spread is just below 169 basis points, according to Tradeweb.


Oil prices rose after data showed U.S. crude oil stockpiles shrank last week. API's weekly data on U.S. oil inventories released Tuesday showed stocks fell by 7.2 million barrels last week. The decline was larger than the consensus estimates, said Helge Andre Martinsen, senior oil analyst at DNB Markets.

Focus is on OPEC+'s July 1 meeting, amid reports that some cartel members are considering advocating increasing supply.

"A potential supply hike of 0.5 million barrels a day from OPEC+ for August, will probably be too little too late, as the oil market will continue in undersupply and further erode OECD oil inventories," he said.

Copper prices rose as fears of tightening from the Federal Reserve ease while China outlines plans to sell its metals reserves.

Three-month copper on the LME was up 0.9% at $9,353.00 a metric ton. China's state reserve body said it would auction 20,000 tons of copper, 30,000 tons of zinc, and 50,000 tons of aluminum. The details helped ease uncertainty about the planned sales which had been weighing on metals markets.

Gold inched higher in early European trade. However, OCBC noted the precious metal may break the crucial support at $1,770 this week if U.S. Fed officials produce more hawkish rhetoric in the coming days.



Apple's Fight for Control Over Apps Moves to Congress and EU

Apple Inc. is stepping up its fight to maintain tight controls over which apps can be installed onto customers' iPhones, as political pressure grows in Washington, D.C. and Brussels to upend those restrictions.

In a report released Wednesday, the company argues that allowing users to download apps directly onto their iPhones without having to use Apple's App Store would harm customers by threatening privacy protections, complicating parental controls and potentially exposing users' data to ransomware attacks.


Pernod Ricard Raises Fiscal 2021 Guidance

Pernod Ricard SA has raised the guidance for its fiscal year on the back of a stronger-than-expected recovery.

The French drinks group said Wednesday it now anticipates an organic growth in profit from recurring operations for fiscal 2021 of around 16%, up from previous guidance of 10%.


Berkeley Group FY 2021 Profit Rose, Proposes Additional Shareholder Return

Berkeley Group Holdings PLC said Wednesday that profit and revenue rose for fiscal 2021, revealed a range of new sustainability targets and proposed an additional shareholder return of surplus cash.


Swiss Re Sells 6.6% Stake in Phoenix for Roughly $610 Mln

Swiss Re AG is selling a 6.6% stake in U.K. long-term savings and retirement business Phoenix Group Holdings PLC for 437 million pounds ($609.7 million).

The Swiss reinsurance company said Wednesday that it has agreed to a 90-day lock-up period for its remaining stake of around 6.6%.


Heineken Buys 15% Stake in United Breweries, Taking Shareholding to 61.5%

Heineken NV said Wednesday that it has expanded its shareholding in Indian conglomerate United Breweries Ltd. to 61.5% from 46.5%.

The Dutch beer company said it acquired an additional 39.6 million shares. Based on the current share price of INR1,429.50, the acquired stake has a value of 56.67 billion rupees ($763.9 million).


Old Mutual Year-To-Date Profitability Rises on Higher Funds Under Management

Old Mutual Ltd. said Wednesday that its profitability improved in the year to date as a result of higher funds under management.

The African financial-services group reported results from operations of 2.68 billion rand ($188 million) for the five months to end-May, up 52% from a year earlier. Funds under management as at May 31 rose to ZAR1.164 trillion from ZAR1.105 trillion a year ago.


Vodafone Says Its European Operations Will Be Fully Powered by Renewables From July

Vodafone Group PLC said Wednesday that its European operations will be fully powered by electricity from renewable sources starting on July 1, as part of its plan to reach net zero carbon emissions by 2030.

The U.K. telecommunications company said it is committed to achieve the same milestone in Africa by 2025.


GFG Alliance, Credit Suisse Agree to Standstill Amid Refinancing

GFG Alliance Wednesday said it has penned a standstill agreement with Credit Suisse on the Australian unit that includes its Whyalla steelworks to complete a refinancing of that business following the collapse of Greensill Capital.

The six-week standstill between GFG and Credit Suisse Asset Management will enable GFG to complete a full refinancing of the unit, Liberty Primary Metals Australia, which also includes mining assets, according to an emailed statement from GFG.


U.S. Seizes Internet Domains Tied to Iran's Government

WASHINGTON-More than 30 web domains linked to the Iranian regime were seized by U.S. agencies on Tuesday, a U.S. government official said.

The U.S. seized sites operated by government-run PressTV as well as social media channels affiliated with Iran-backed militias in Iraq. The seizures come as the Biden administration is in the midst of negotiations over Tehran's nuclear program and follow the election of a new president who has rebuffed calls from Washington to curb its support for proxies fighting across the region.


France's Macron Pushes Controls on Religion to Pressure Mosques

PARIS-President Emmanuel Macron is redrawing the line that separates religion and state, in a battle to force Islamic organizations into the mold of French secularism.

In recent months, his administration has ousted the leadership of a mosque after temporarily closing it and poring over its finances. Another mosque gave up millions in subsidies after the government pressured local officials over the funding. A dozen other mosques have faced orders to close temporarily for safety or fire-code violations.



Fed's Powell Plays Down Inflation Threat

WASHINGTON-Federal Reserve Chairman Jerome Powell said it's highly unlikely that inflation will rise to levels seen in the 1970s but acknowledged significant uncertainty as the economy reopens.

While the Fed anticipated that the end of the pandemic would temporarily push up inflation this year, Mr. Powell said Tuesday on Capitol Hill that the increases in prices have been larger than central bankers had expected and may prove more persistent. But he underscored his view that shortages-including of used cars, computer chips and workers-will fade over time, bringing inflation closer to the Fed's 2% long-run target.


Derby's Take: New York Fed Boss Isn't Worried About Reverse Repo Surge

A tsunami of cash continues flooding into a once obscure Federal Reserve facility, and the central bank official closest to it isn't concerned in the slightest bit.

Over recent weeks, cash, largely from money-market funds but also from banks and government sponsored entities, has poured into what the Fed calls its reverse repo facility. After years of obscurity and disuse, interest in the facility increased in the spring. Ahead of last week's Federal Open Market Committee meeting, the facility was seeing inflows of half a trillion dollars a day.


Amazon and Other Tech Giants Race to Buy Up Renewable Energy

The race to secure electricity deals for power-hungry data centers has tech companies reshaping the renewable-energy market and grappling with a new challenge: how to ensure their investments actually reduce emissions. Inc. said it planned Wednesday to announce commitments to buy 1.5 gigawatts of production capacity from 14 new solar and wind plants around the world as part of its push to purchase enough renewable energy to cover all of the company's activities by 2025.


The Bonds That Cried Major Default Risk

The villagers in "The Boy Who Cried Wolf," bored of their shepherd boy's constant false alarms, refuse to come to his aid when a wolf finally does appear. There may be a lesson in the fable for investors in Chinese property giant Evergrande and the country's real-estate market more broadly.

Heavily leveraged Evergrande is in the midst of yet another financial squeeze. The company announced Sunday and Monday that it has recently sold almost $1 billion of holdings in two companies-internet services firm HengTen Networks and smaller real-estate developer China Calxon. Fitch Ratings cut Evergrande's credit rating Tuesday from B+ to B, noting the company's seemingly limited access to capital markets and growing dependence on less stable shadow-banking loans.


China Investigates Bulk Commodity Prices and Supplies

China's top economic planner and market regulator have sent teams to investigate recent price and supply trends of bulk commodities, the latest move by Beijing to rein in the sector's sharp rally this year.

The groups, made up of officials from the National Development and Reform Commission and the State Administration for Market Regulation, will visit various cities and provinces to find out more about spot trading in commodities and the recent upstream supply and price changes, the NDRC said Wednesday.


Bank of Thailand Keeps Rate at Record Low

Thailand's central bank left its benchmark interest rate unchanged at a record low, as the Covid-19 pandemic continued to weigh on the economy.

The Bank of Thailand said Wednesday that its policy committee voted unanimously to maintain its one-day repurchase rate at 0.50%.


Delta Covid-19 Variant Could Be Dominant in U.S. in Two to Three Weeks, Study Says

The highly transmissible Delta variant of the Covid-19 virus is spreading so rapidly in the U.S. that it could become the dominant strain in the next two to three weeks, researchers said, adding urgency to the nationwide vaccination drive.

The Delta strain, which first emerged in India in late 2020 and is also known as B.1.617.2, will probably make up 50% of Covid-19 infections in the U.S. by early to mid-July, said William Lee, vice president of science at population genomics company Helix and an author of the new analysis.


Daly Says It Is Critical for Fed to Understand Risks of Climate Change

Federal Reserve Bank of San Francisco leader Mary Daly said climate change has the potential to reshape the economy and because of that, the issue is becoming a part of how central bankers need to think about their monetary policy choices.

Climate change is on a path to bring "economic upheaval, boosting innovation, output, and jobs in green sectors, while reducing them in carbon-intensive ones," Ms. Daly said in a virtual appearance.


Fed Officials Stress Bond Buying Isn't Aimed at Boosting Housing Market

Federal Reserve Bank of New York President John Williams said central bank bond buying is designed to help create widespread easy credit conditions and isn't directly targeted at supporting the housing market.

Mr. Williams, in a Bloomberg television interview Tuesday, was responding to a question about whether the central bank may want to rethink its $40 billion a month of mortgage bond purchases. This buying, which is joined with $80 billion a month in Treasury buying, is coming at a time of strength in the housing market, which has caused some to question whether the central bank should still offer such aid.


North Korea Gives the U.S. the Cold Shoulder on Nuclear Talks

SEOUL-In nuclear diplomacy with the U.S., North Korea is playing hard to get, for now.

The Kim Jong Un regime this year has rebuked the Biden administration's outreach for engagement, without detailing what might woo them back to talks beyond vague demands. As diplomacy stalls, Pyongyang is adding to its nuclear arsenal, which President Biden has called the biggest foreign-policy threat facing the U.S.


Illicit Covid-19 Drugs Bound for Mexico Seized by U.S. Authorities

Federal authorities have seized at U.S. airports unauthorized versions of the Covid-19 treatment remdesivir destined for distribution in Mexico, the latest effort by the government to root out criminal activity related to the pandemic.

Counterfeit or generic versions of remdesivir, an antiviral manufactured by Gilead Sciences Inc., are arriving in the U.S. by plane from Bangladesh and India and being smuggled by individuals to Mexico for patients willing to pay top dollar for the drugs, people familiar with the investigation said.


U.S. Seizes Internet Domains Tied to Iran's Government

WASHINGTON-More than 30 web domains linked to the Iranian regime were seized by U.S. agencies on Tuesday, a U.S. government official said.

The U.S. seized sites operated by government-run PressTV as well as social media channels affiliated with Iran-backed militias in Iraq. The seizures come as the Biden administration is in the midst of negotiations over Tehran's nuclear program and follow the election of a new president who has rebuffed calls from Washington to curb its support for proxies fighting across the region.


Write to

Write to us at

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to

This article is a text version of a Wall Street Journal newsletter published earlier today.


(END) Dow Jones Newswires

June 23, 2021 06:24 ET (10:24 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.