Global Stocks Rise Ahead of ECB Meeting

The information billboard charting the progress of the FTSE 100 index at the Swiss exchange in Zurich.

“The euro has a high weighting in the dollar index, so when the euro falls, the index tends to rise”, said Ayako Sera, a senior market economist with Sumitomo Mitsui Trust in Tokyo. Emerging-market stocks slumped towards the worst week since August.

The European Central Bank looks on course to increase its monetary easing at its next meeting in the first week of December, while the Federal Reserve approaches its first interest rate in nine years. “I suspect that would not have major impact on the equity markets as all, as this news have been priced in”, Henin added.

In addition to the ECB’s policy decision on Thursday, the International Monetary Fund will decide this week whether to grant China’s yuan status as a reserve currency, OPEC members will meet to discuss oil production, Fed Chair Janet Yellen will appear before Congress, and then on Friday, the monthly U.S. payrolls report is due.

Asian stocks finished in the red on Monday, with the MSCI Asia-Pacific index losing 0.8% and ending the month month in negative territory for the sixth time in seven months.

He launched long-term refinancing loans to encourage banks to lend more into the economy, set up the bond-buying safety net after promising in a 2012 speech to do “whatever it takes to preserve the euro”, and announced the current QE programme would be worth one trillion euros. “A Fed hike is pretty much priced in by now, so equities will probably trade in a tight range”.

On Friday, the main U.S. indexes ended steady, with minor cuts on European stocks. Investors are awaiting reports from pending home sales today to manufacturing data tomorrow and the monthly Labor Department jobs update on Friday.

The pan-European FTSEurofirst 300 index rose 0.4 percent, close to three-months highs reached last week. It fell 60 cents on Friday to $44.86.

While carmakers led gains in Europe stocks, miners fell as shares in BHP Billiton Ltd. dropped to the lowest since November 2008 after iron ore futures in Singapore sank below $40 a metric ton for the first time. It last traded down 0.1 percent at $1,057 an ounce. The lira advanced after Turkey and the European Union agreed on measures to counter terrorism and help stem a refugee crisis, backed by EU aid.

The Chinese market may have been aided by talk about Chinese government intervention to steady the yuan ahead of the IMF’s meeting in Washington later on Monday which is expected to approve the yuan’s inclusion in the Special Drawing Rights basket of currencies. The dollar and short-term USA bond yields have soared, while the euro and short-term euro zone bond yields have plunged.

Consumer-price data for Germany out on Monday showed inflation in Europe’s largest economy rose to 0.3% on the year (http://www.marketwatch.com/story/german-inflation-edges-up-still-below-ecb-target-2015-11-30) in November, meeting analyst forecasts. It had been as low as $1.0565 on Wednesday – a level not see since April.

“The question now is how far can we go, and as the Fed tightens, euro/dollar parity is looking likely by the second quarter of next year”. Brent crude, which is used to price worldwide oils, was up 71 cents at $45.56 per barrel in London.