European Stocks Waver While Asian Shares Rise on Strong China Data
17 Abril 2019 - 5:51AM
Dow Jones News
By Paul J. Davies
Stronger Chinese growth data lifted Asian stocks Wednesday,
although European indexes were down marginally, suggesting that
investors were taking a pause after several days of rising
prices.
However, U.S. markets were priced to open slightly higher, with
futures for both the Dow Jones Industrial Average and the S&P
500 up 0.1%.
The Shanghai A-Share index in China and the Nikkei 225 in Japan
were both up around 0.25% Wednesday after data showed first-quarter
Chinese gross domestic product was better than expected, with
growth of 6.4% year-over-year, boosted by very strong industrial
production and much better retail sales.
The news led Citigroup economists to lift their full-year
forecast for China's GDP growth to 6.6%, saying they now expected a
U.S.-China trade deal and greater domestic policy effectiveness in
China, boosting demand.
"Our new baseline scenario is that a framework trade deal
between the U.S. and China will be reached in [the second quarter]
and it will lift most, if not all, existing punitive tariffs," they
wrote. "The government's repeated messages to support private
entrepreneurship and carry on market-oriented reforms have greatly
reduced the policy uncertainty in China."
In Europe, the Stoxx 600 index opened 0.1% lower after hitting
its highest closing level in 2019 on Tuesday. Likewise, the FTSE
100, which also closed at a 2019 record, slipped 0.1% at the
open.
As with U.S. stocks, the recent European rally has been a
bloodless one with relatively weak trading volumes, especially this
week ahead of the Easter holiday.
Evidence of an appetite for risk was visible in rising
government bond yields. The U.S. 10-year Treasury rose Wednesday to
2.608%, from 2.592% on Tuesday afternoon. The German 10-year bund
yield also climbed, to 0.096% from 0.069%.
Both have retraced almost all of their moves since a rush into
safe assets in late March lifted prices and pushed down yields.
The 10-year German yield, which turned negative in late March
and early April, is now at its highest since March 6. In the U.S.,
the yield gap between three-month and 10-year Treasurys, which also
turned negative in late March, is at its widest since March 11.
Another haven, gold, hit its lowest price Tuesday since the
depths of the stock market selloff in late December. But Wednesday,
the precious metal was up 0.3% at $1,280.30, which is still its
lowest since a one-day dip in late January.
Brent crude oil was up 0.46% at $72.04. The WSJ Dollar Index,
which measures the dollar against a basket of currencies, was down
0.2%.
Write to Paul J. Davies at paul.davies@wsj.com
(END) Dow Jones Newswires
April 17, 2019 04:36 ET (08:36 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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