Europe stocks rise on earnings, french bonds gain: Markets wrap

Bloomberg.- Positive momentum from earnings filtered through stocks after Societe Generale SA beat estimates, while Treasuries fell with German bunds and the debt of France and Italy gained amid ebbing political risk.

Banks paced gains as the Stoxx Europe 600 Index rose for a third day. Societe Generale benefited from consumer banking, offering relief to lenders that have been dragged lower by anxiety over looming elections. Treasuries halted the longest stretch of gains since the weeks before June’s Brexit vote while bonds of peripheral countries and France rebounded. Gold backed off its highest level since November.

An upbeat corporate outlook following many better-than-expected earnings is proving a welcome diversion from risks surrounding elections in at least three core euro zone countries. As the wait for details on Donald Trump’s pro-growth policies goes on, the mixed sentiment has been on display globally, helping boost demand for bonds and precious metals viewed as defensive plays at the same time as riskier assets such as emerging-market stocks.

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“The great thing about earnings is that they are something investors have a handle on,” said Frances Hudson, an Edinburgh-based global thematic strategist at Standard Life Investments, which oversees about $ 360 billion. “It’s a relief to focus on things that are susceptible to rigorous analysis.”

What’s coming up in the markets:

– More than 1,000 workers at BHP’s Escondida copper mine in Chile are still preparing for a long strike, a union spokesman said. Mining companies could also curb copper output, turning back to lower ore grades as the commodity slump eases, Goldman Sachs said.
– The IEA and OPEC monthly reports are due on Friday and Monday, respectively, providing the first full month of production data since OPEC’s supply deal.
– By the end of this week the U.S. should have sold a total of $62 billion of three-, 10- and 30-year securities in its quarterly refunding.
– Japanese Prime Minister Shinzo Abe travels to Washington on Friday to meet with U.S. President Donald Trump.
– A U.S. court of appeals is reviewing arguments on whether to reinstate the Trump administration’s temporary ban on immigration, with the outcome likely to be appealed to the Supreme Court.

Here are the main market moves:

Bonds

– Treasuries fell, with 10-year yields rising three basis points to 2.35 percent as of 8:06 a.m. in New York, halting a rally that took yields to the lowest in three weeks on a closing basis Wednesday.
– Italian bonds gained, with the yield on debt due in a decade shedding four basis points, while the yield on French counterparts fell three basis points. German benchmark yields rose one basis points to 0.30 percent.

Currencies

– The Bloomberg Dollar Spot Index was little changed.
– The euro weakened 0.2 percent to $1.0681 and the British pound strengthened 0.1 percent to $1.2555.

Stocks

– The Europe Stoxx 600 climbed for a third day, adding 0.5 percent. Societe Generale rose 2.8 percent.
– Futures on the S&P 500 edged up 0.2 percent.

Commodities

– Oil rose 0.9 percent to $52.81 per barrel. The global oil market’s march to equilibrium won’t be deterred by the increasing volume of crude being poured into U.S. storage tanks, according to Goldman Sachs Group Inc.
– Copper three-month forwards fell 0.3 percent. The metal jumped 1.7 percent Wednesday after workers at the biggest mine in Chile vowed to strike.
– Gold declined 0.2 percent to $1,238.89 an ounce, after touching the highest level since November on Wednesday.

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