European stock markets have opened up after a broadly cautious trading session on Monday, in which geopolitics and Thursday’s Jackson Hole gathering of central bankers weighed on sentiment.
The FTSE 100 rose 0.7 per cent in Tuesday’s early trading, led higher by mining stocks after Chilean copper producer Antofagasta reported higher metal prices. The Stoxx 600 is up 0.5 per cent and the Xetra Dax is 0.7 per cent higher.
Investors are watching the global meeting for clues on how the European Central Bank plans to wind down its €2tn ($2.4tn) quantitative easing programme.
The euro is 0.2 per cent lower at $1.179 as traders await clues from ECB president Mario Draghi about the direction of the currency when he speaks at Jackson Hole. The eurozone’s single currency has been trading broadly sideways since early this month after coming off its peak, which saw it briefly top $1.19.
Peter Chatwell, a strategist at Mizuho, says:
The calm before the storm continues for the second consecutive session this week. There is little on the calendar likely to … give the market fresh impetus. The Bundesbank August report published yesterday painted a relatively optimistic economic picture, upgrading its growth forecast. The most notable discussions of the report were arguably around the failure of wages to pick up in the face of better economic activity and about the negative impact the higher euro has on import prices. Both themes … underpin our macro bullish Bund view. Our feeling is that the market is generally coming around to this view and to the benign outlook for monetary policy it implies.
The dollar index, a measure of the currency against a basket of peers, is up 0.2 per cent at 93.299 after earlier hitting a one-week low of 93.166.
The Japanese yen is among the biggest movers of major currencies, weakening 0.3 per cent against the US dollar to ¥109.3.
China’s onshore renminbi earlier rose against the dollar to its strongest level in almost two weeks, at Rmb6.6571, after the People’s Bank of China fixed the currency’s daily trading midpoint at Rmb6.6644.
Asia-Pacific equities rose in Tuesday’s trading amid a spate of positive corporate earnings news from the region. Hong Kong’s Hang Seng index is up 1.1 per cent, driven by the real estate sector and financials.
Pakistan’s main stock exchange in Karachi saw prices fall more than 2 per cent after Donald Trump sounded a threatening note; in a speech he accused the country of acting as a “safe haven” for Taliban militants.
The yield on the 10-year US Treasury, which moves inversely to its price, is 2 basis points higher at 2.204 per cent. European bond yields are steady, with the 10-year German Bund at 0.412 per cent.
Oil prices are edging upwards. The international benchmark, Brent crude, is up 0.6 per cent to $51.97 a barrel after recent sharp moves saw it gain 3.7 per cent late last week, before falling more than 2 per cent on Monday. US marker West Texas Intermediate is up by 0.6 per cent to $47.66 a barrel.
Gold is down 0.5 per cent to $1,284.82, following its highest close since early June on Monday.