European stocks rise again, helping China’s price move sense

LONDON, May 20 (Reuters) – Shares rose again on Friday after China cut a key credit rating to support its economy, despite a global weekly stock market record record loss amid investor concerns over sluggish growth and high inflation.

China lowered its five-year debt prime rate (LPR) – which affects mortgage prices – by 15 basis points on Friday morning, sharper cuts than expected, as officials seek to mitigate the impact of the recession. This was one year LPR unchanged. read more

1053 GMT, Pan-European STOXX 600 (.STOXX) Was up 1.6%, its first daily gain in the third.

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MSCI Global Equity Code (.MIWD00000PUS). Data extended to January 1988.

U.S. stock futures indicated that the S&P 500 E-Minis was up 1.1%, the Dow Future was up 0.9% and the Nasdaq 100 Futures was up 1.4%.

“Investors obviously want to do a little bargain-hunting because some stocks seem so cheap at the moment,” said Nathan Sweeney, CIO deputy to multiple assets at Marlborough, an investment manager.

He added that China’s LPR reduction “shows that not all central banks are trying to create a market-selling environment.”

Eurozone securities were higher after two days of sharp fall as risk perception improved following China’s rate cut.

Germany’s 10-year government bond yield was up 5 basis points (bps) 0.989%, down from last week’s eight-year high of 1.189%.

With the July meeting of the European Central Bank, the money markets are now set at 38 basis points. This suggests that the 25 bps hike is fully priced, and that the markets add up to an approximately 52% probability of a 25 bps move. read more

“The July lift-off is almost certain to move to zero deposit rates in September,” said a research note by Bank of America Global Research analysts.

“Our optimism about the four interest rate hikes in total this year is growing, and the noise is likely to move in the direction of a 50bp hike higher than the 25bp we expect to continue.”

The U.S. 10-year yield was up 2.864%, up one basis point from Thursday’s close, to 2.873% on Friday. The two-year yield was up two bps at 2.631%, compared to the US close of 2.611%.

In the currency markets, movements against the dollar were relatively stagnant, but 10% since the beginning of February, heading for an even worse week after a 14-week rise.

The dollar, which measures the currency against six major rivals, was down 0.1% at 102.84.

As the dollar depreciated, gold prices stabilized and set their first weekly gains since mid-April. Spot gold rose 0.2% to $ 1,846 an ounce, hitting a one-week high of 1.4% on Thursday.

With the planned European embargo on Russian oil, oil prices have mixed with investors’ weak global economic growth outlook and a tight central bank monetary policy. read more

Brent futures for July delivery were up 27 cents or 0.24% at $ 112.30 a barrel, while US West Texas Intermediate (WTI) crude for June was down 19 cents or 0.17% at $ 112.02 a barrel.

The most actively traded WTI deal for July was up 6 cents to $ 109.95 a barrel.

Bitcoin was $ 30,301. Ether, the smallest competitor, rose 1% to $ 2,037.

The value of global stocks fell by $ 13 trillion
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Report by Samuel Indyck in London and Andrew Calbright in Shanghai; Editing by John Stone Street and Hugh Lawson

Our standards: Thomson Reuters Trust Principles.

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