U.S. Opening Bell: Global Stocks Rise Ahead Of Busy Week For Central Banks

On Monday, ahead of a week during which an array of global central bank policy decisions are scheduled, US contracts for the Dow Jones, S&P 500, NASDAQ and Russell 2000 all started the trading week higher, and European equities gained.

Yields dropped and the dollar rose.

At time of writing, all four US index futures were in the green, building on Friday's Wall Street rally. Earlier Monday, Russell 2000 contracts gained nearly twice as much as peer index contracts, though the gains have levelled off as we publish, indicating the reflation trade continues to waver.

Cyclicals were also in favour in Europe, pushing the Stoxx Europe 600 Index into a rebound, as iron ore jumped on speculation that China will increase stimulus next year, boosting demand for construction.

Most Asian benchmarks rose, shrugging off Friday's US data showing the highest inflation in almost 40 years. Investors seem relieved that the bad news was already baked in, suggesting the market has already repriced for the worst inflation in four decades, with some warning of a repeat of the '70s.

China's Shanghai Composite Index gained 0.4% on expectations the Asian nation will do more to stimulate the economy next year. Hong Kong's Hang Seng, however, slipped almost 0.2%

Japan's Nikkei 225 advanced 0.7% on hopes of an economic recovery. The current market narrative suggests local traders are hopeful that the week's robust central bank activity will boost investor confidence. The benchmark index ended a back-to-back selloff today, marking its first gain in three sessions after Japan's Core Machinery Orders rose in October, for the first time in three months.

On Friday, all four major US averages rose, with the S&P 500 Index scoring a new record close for the first time since Nov. 18. The broad benchmark ended the week higher for the first time in four weeks. The NASDAQ 100 and the Russell 2000 had their first weekly gains in five. For the tech-heavy NASDAQ 100, it was also the end of a two-week selloff.

Yields on the 10-year Treasury benchmark slipped today, perhaps indicating that bond traders have extended the buying that started on Thursday. 

The dollar rose today, in keeping with the up-down pattern seen over the past four sessions.

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The greenback is retesting the top of a bullish pattern for the second straight session.

The pound sterling dropped, nearing its lowest level since November 2020, after UK Prime Minister Boris Johnson tightened social restrictions after warning that Britain is facing a "tidal wave" of Omicron contagion.

The Turkish lira plunge continued this morning.

Monday's move extended the currency's all-time low after S&P Global Ratings reduced its forecast for Turkey's sovereign credit rating to negative.

Gold was little changed, but this may be the quiet before the storm.

The precious metal could be setting up an H&S bottom on the 4-hour chart.

Bitcoin wiped out yesterday's gains and additionally trimmed some made on Saturday.

Oil opened higher on bets that China, the world's largest importer, will increase stimulus, thereby boosting economic activity and, along with it, oil demand. However, the energy commodity is struggling to maintain the price advance.

h2 Up Ahead/h2

• The US Fed's two-day policy meeting concludes on Wednesday; Fed Chair Powell will update markets afterward.
• China releases November industrial output and retail sales data on Wednesday.
• An array of global central bank rate decisions will be released on Thursday: Indonesia, Mexico, England, European Central Bank, Norway and Taiwan among others.
• Thursday brings Manufacturing PMI data from: Eurozone, France, Germany, UK and Australia (local time). 
• On Friday rate decisions from Colombia, Japan and Russia will be announced.

h2 Market Moves/h2 h3 Stocks/h3

• The Stoxx Europe 600 rose 0.3% as of 8:24 a.m. London time
• Futures on the S&P 500 rose 0.3%
• Futures on the NASDAQ 100 rose 0.2%
• Futures on the Dow Jones Industrial Average rose 0.3%
• The MSCI Asia Pacific Index fell 0.7%
• The MSCI Emerging Markets Index fell 0.7%

h3 Currencies/h3

• The British pound fell 0.3% to $1.3236
• The Bloomberg Dollar Spot Index rose 0.2%
• The euro fell 0.2% to $1.1286
• The Japanese yen fell 0.2% to 113.62 per dollar
• The offshore yuan rose 0.1% to 6.3688 per dollar

h3 Bonds/h3

• Britain's 10-year yield was little changed at 0.74%
• The yield on 10-year Treasuries slipped to 1.48%
• Germany's 10-year yield was little changed at -0.34%

h3 Commodities/h3

• Brent crude rose 0.8% to $75.77 a barrel
• Spot gold rose 0.2% to $1,785.84 an ounce