By Caitlin Ostroff and Joanne Chiu
-- U.S. stock futures up
-- Government bond yields rise
-- Asian, European stocks tick higher
Global markets edged up Monday after China late Friday undertook
stimulus measures as data showed its economy has been pressured by
trade tensions with the U.S.
China's central bank cut lenders' reserve requirement ratios, a
move that could free up 900 billion yuan ($126 billion) to finance
projects that might spur construction and sustain employment.
The gains in mainland Chinese stocks were capped, however, as
the weak trade data offset the stimulus measures. The Shanghai
Composite Index stood 0.8% higher by midafternoon.
Elsewhere in the region, Japan's Nikkei 225 rose about 0.5%,
while Hong Kong's Hang Seng Index and Australia's S&P/ASX 200
were little changed.
Futures for the S&P 500 were up 0.3%. The contracts don't
necessarily predict market moves after the opening bell.
In Europe, the Stoxx Europe 600 edged up 0.1%, with Germany's
DAX up 0.3% and the U.K.'s FTSE 100 down 0.3%.
Shares of Air France-KLM slid 8.4% after the airline warned of
weaker-than-forecasted bookings. Shares of Associated British Foods
ticked down 3% after the company said its adjusted
earnings-per-share is expected to be in line with last year.
Market-friendly developments -- including the Chinese stimulus,
new U.K. legislation aimed at preventing a no-deal Brexit and
better-than-expected German export figures for July -- were
tempered by poor Chinese export data and U.S.-China trade tensions,
said Craig Erlam, a senior market analyst for foreign exchange
"When you consider the whole package of things, it's a little
bit neutral," he said of the market. "We're treading water."
U.S. stocks Friday also posted small gains following a
weaker-than-expected jobs report that lifted investor hopes for an
interest-rate cut from the Federal Reserve.
Data released at the weekend showed that Chinese imports fell
for a fourth- straight month in August, as a drop-off in exports to
the U.S. steepened, highlighting the impact of the two countries'
prolonged trade spat. Economists believe that China's economy isn't
tanking, but it is almost certainly weaker than official reports
Larry Hu, China economist at Macquarie Group, said the central
bank move was "too little, too late." The lower reserve
requirements would have a limited impact on the economy and policy
makers are set to do more in the coming months, he said in a
Still, the move seems to have brought optimism to investors.
"The People's Bank of China's determination to fight the economic
slowdown encouraged investors to buy stocks on Monday open, but
gains remained timid," said Ipek Ozkardeskaya, a senior analyst at
London Capital Group.
The yield on 10-year U.S. Treasurys rose to 1.601%, from 1.552%
on Friday. Yields rise when prices fall.
European government bond yields rose across the board. The
Italian 10-year yield rose to 0.943% from 0.885% Friday. The German
10-year bund was yielding minus 0.596%, up from minus 0.634% before
The falling yields came amid expectations for a cut in interest
rates by both the Federal Reserve and the European Central Bank
this month, said David Cheetham, chief market analyst for online
foreign-exchange brokerage XTB.
The expected depth of those cuts was reigned in by Fed Chairman
Jerome Powell, and the market is now adjusting its expectations
from larger cuts previously priced in, Mr. Cheetham said. He
expects the Fed to cut by 25 basis points and the ECB to cut by 10
"We've seen a strong move lower on this expectation on stimulus
measures, and now the markets doing a wait and see," he said.
In currencies, the British pound was up 0.5% against the U.S.
dollar at $1.2293. The pound last week fell briefly below $1.20
amid U.K. political turbulence, before recovering slightly amid
signs that a no-deal Brexit may be avoided. The queen is expected
to sign a bill that would prevent Prime Minister Boris Johnson from
pursuing a break from the European Union without a deal in
In commodities, Brent crude oil rose 0.8% to $62.02 a barrel
after Saudi crown prince Mohammed bin Salman appointed Prince
Abdulaziz bin Salman, an experienced oil official and son of the
country's king, as head of the powerful energy ministry. Prince
Abdulaziz is expected to continue OPEC's efforts to bolster energy
prices by cutting production.
Phillip Waller contributed to this article.
Write to Caitlin Ostroff at email@example.com and Joanne
Chiu at firstname.lastname@example.org
(END) Dow Jones Newswires
September 09, 2019 06:34 ET (10:34 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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