(Bloomberg) — U.S. futures rose with stocks as signs of China’s recovery and resilience in Europe stoked optimism about the global economy. Treasuries and the dollar also gained.
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Contracts on all three major U.S. gauges gained more than 1%, signaling a strong start to the first day of trading on Wall Street this year. Tesla Inc. dropped 4.1% in premarket trading after fourth-quarter deliveries missed estimates. The Stoxx Europe 600 Index climbed as a surprise drop in German unemployment showed resilience in the region’s biggest economy.
Stocks in Hong Kong and mainland China rallied, with a recovery in subway use indicating Covid infections may have peaked in some of the country’s biggest cities. U.S.-listed Chinese firms including internet stocks Alibaba Group Holding Ltd. and Baidu Inc. rose in premarket trading, as did electric vehicle makers such as Nio Inc.
Investors are kicking off 2023 with tempered expectations after sharp swings last year saw 20% in value wiped out from global equities, the worst showing since the financial crisis. Bonds also declined as central banks hiked interest rates to slow inflation.
“Hopes that supply chain issues in China will continue to ease, which could help bring down inflation, may be feeding into sentiment,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Traders are “seizing onto glimmers of hope that once the winter waves die down, China’s recovery could be back on track.”
A dollar gauge advanced after two days of declines. The yen briefly strengthened to a six-month high versus the greenback, before paring gains.
Elsewhere, oil prices rose while European gas prices declined as persistent mild weather curbed demand.
Read more: Treasury Strategists Expect Lower Yields, Steeper Curve in 2023
The main markets moves are:
Stocks
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The Stoxx Europe 600 rose 1.8% as of 9:59 a.m. London time
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S&P 500 futures rose 1.1%
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Nasdaq 100 futures rose 1.3%
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Futures on the Dow Jones Industrial Average rose 1%
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The MSCI Asia Pacific Index was little changed
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The MSCI Emerging Markets Index was little changed
Currencies
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The Bloomberg Dollar Spot Index rose 0.7%
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The euro fell 1.1% to $1.0545
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The Japanese yen rose 0.3% to 130.45 per dollar
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The offshore yuan rose 0.2% to 6.9139 per dollar
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The British pound fell 1% to $1.1920
Cryptocurrencies
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Bitcoin was little changed at $16,736.31
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Ether fell 0.2% to $1,217.03
Bonds
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The yield on 10-year Treasuries declined 14 basis points to 3.74%
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Germany’s 10-year yield declined nine basis points to 2.35%
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Britain’s 10-year yield declined 12 basis points to 3.55%
Commodities
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Brent crude rose 0.3% to $86.14 a barrel
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Spot gold rose 0.8% to $1,838.66 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Jason Scott, Tassia Sipahutar, Richard Henderson, Jan-Patrick Barnert and Sagarika Jaisinghani.
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