Stocks, commodities rally on China’s data beat: Markets wrap

Stocks in Europe climbed and commodities rallied after better-than-expected economic data in China fueled hopes the nation’s stimulus measures are paying off. The euro headed for a record run of weekly declines.

Europe’s Stoxx 600 added 0.9%, following Asian peers higher, after Chinese industrial production and retail sales data beat estimates. Bets that the European Central Bank’s tightening cycle is over sent the euro toward its ninth straight week of losses, the longest run since it was created over two decades ago.

Signs that China’s economy could be on the mend put the Bloomberg Commodity Index on track for its biggest weekly gain in two months. Iron ore rose to the highest since early April and industrial bellwether copper climbed for a third day. Brent crude rose as much as 1% and was on the cusp of a third weekly gain.

Traders’ attention now turns to the Federal Reserve’s rates meeting next week. The dollar fell versus most major peers, with the Bloomberg dollar index set to snap eight weeks of gains, and Treasury yields climbed.

The greenback is losing ground as “the better-than-expected China data certainly gives excuse for profit-taking as we head into the weekend before the FOMC decision,” said Fiona Lim, a senior analyst at Malayan Banking Bhd. in Singapore.

US equity futures advanced, but traders will be watching for fallout from a strike by Detroit carmakers after deadlines for new contracts lapsed. Markets were also braced for Friday’s triple witching options event — which has the potential to trigger volume spikes and volatility.

The People’s Bank of China kept the interest rate on its one-year medium-term lending facility unchanged and added further cash into markets via a key policy loan for the 10th month to help loosen conditions, a day after it announced another cut to lenders’ reserve requirements.

“The improvement in industrial production and retail sales is encouraging,” said Frances Cheung, a rates strategist at Oversea-Chinese Banking Corp. in Singapore. “Recent economic data point to some stabilization.”

Key events this week:

• US industrial production, University of Michigan consumer sentiment, Empire Manufacturing index, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.9% as of 8:14 a.m. London time
• S&P 500 futures rose 0.2%
• Nasdaq 100 futures rose 0.1%
• Futures on the Dow Jones Industrial Average rose 0.2%
• The MSCI Asia Pacific Index rose 0.7%
• The MSCI Emerging Markets Index rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%
• The euro rose 0.2% to $1.0659
• The Japanese yen fell 0.2% to 147.74 per dollar
• The offshore yuan rose 0.2% to 7.2748 per dollar
• The British pound rose 0.2% to $1.2429

Cryptocurrencies

• Bitcoin was little changed at $26,582.97
• Ether was little changed at $1,628.97

Bonds

• The yield on 10-year Treasuries was little changed at 4.29%
• Germany’s 10-year yield advanced three basis points to 2.63%
• Britain’s 10-year yield advanced three basis points to 4.32%

Commodities

• Brent crude rose 0.7% to $94.31 a barrel
• Spot gold rose 0.3% to $1 916.21 an ounce