Stocks in Upbeat Mood as Oil Rises, Havens Slip

EghtesadOnline: European stocks were poised to snap a five-day losing streak amid a broad-based rally. The pound declined as better-than-expected manufacturing data failed to offset political risk before the impending election, and crude bounced.

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01 June 2017

Fifteen of 19 industry groups on the Stoxx Europe 600 Index advanced, helped by media companies after Barclays upgraded Auto Trader, the online vehicle market place, and said fears for the used car market have been overdone. Oil trimmed much of its gain, but stayed higher in the wake of data pointing to a bigger-than-expected drop in U.S. stockpiles. The euro fell after two days of gains while the dollar strengthened. China’s onshore yuan headed for a fourth day advancing amid speculation policy makers are trying to discourage bets against the currency, Bloomberg reported.

Investors appear to be in a confident mood as this week’s slew of economic and global data continues. With U.S. policy makers meeting in two weeks, all eyes will be on the jobs report Friday for more insight on the state of the world’s largest economy. Federal Reserve Bank of San Francisco President John Williams said in Seoul that if the economy is strong enough, the central bank can raise interest rates four times in 2017.

Meanwhile, in Asia data showed capital spending in Japan topped estimates during the first quarter, while corporate profits jumped 27 percent. In China, the weakness in the Caixin manufacturing gauge -- with a smaller sample size -- contrasts with the government’s reading Wednesday showing the manufacturing PMI was steady last month.

Here are some of the key upcoming events:

U.S. manufacturing probably continued to expand at a robust pace in May, an index from the Institute for Supply Management is projected to show on Thursday.

Data from Brazil may show the economy expanded in the first quarter to leave a two-year recession behind, though explosive graft allegations against the current and past governments threaten to derail the nascent rebound.

The U.S. jobs report Friday may bolster the case for a rate hike, with a gain of 180,000 positions expected.

Here are the main moves in markets:

Asia

The MSCI Asia Pacific Index rose 0.3 percent, after capping its fifth straight monthly gain for the longest winning streak since 2013.

Japan’s Topix rallied 1.1 percent as capital spending topped estimates. The Shanghai Composite Index retreated after a private gauge of China’s manufacturing fell below 50.

The onshore yuan climbed 0.1 percent, advancing for a fourth day amid speculation policy makers are trying to discourage bets against the currency.

Stocks

The Stoxx Europe 600 Index advanced 0.3 percent as of 11:33 a.m. in London, after finishing May with a 0.8 percent increase.

Futures on the S&P 500 added 0.1 percent. The underlying gauge fell 0.1 percent Wednesday, trimming its May gain to 1.2 percent. It closed Friday at a record.

Currencies

The pound fell 0.4 percent to $1.2836. The euro weakened 0.1 percent to $1.1232.

The Bloomberg Dollar Spot Index rose 0.1 percent, following a 1.5 percent decline for May for the biggest monthly drop since January. The greenback was up against all its Group of 10 peers except for the Canadian dollar.

The yen slipped 0.3 percent to 111.12 per dollar, after gaining in the month of May.

Commodities

West Texas Intermediate crude oil advanced 0.4 percent to $48.51 a barrel after a 2.7 percent drop in the previous session.

Gold dropped 0.2 percent to $1,266.16 an ounce, giving back some of Wednesday’s 0.5 percent gain.

Bonds

The yield on 10-year Treasuries rose one basis point to 2.21 percent, after falling a similar amount on Wednesday.

Italian benchmark yields increased two basis points.