European Stocks Rise Before German Spending Vote: Markets Wrap

European stocks rose as investors prepared for the outcome of a German parliamentary vote on a massive spending package and awaited a call between the US and Russian leaders over Ukraine.

Europe’s Stoxx 600 index climbed 0.4%. US equity futures were steady. The MCSI Asia Pacific Index rose rose a third session. 

German lawmakers are set to vote on a bill Tuesday that would unlock hundreds of billions of euros in debt-financed defense and infrastructure spending. The move would herald a pivot toward a substantially more expansive fiscal policy in Europe’s biggest economy. The DAX equity index has rallied 17% this year. German bonds fell Tuesday ahead of the decision.

“International investors, who have increasingly invested in German stocks over the past few months, are hopeful for a significant boost in fiscal policy,” said Jochen Stanzl, an analyst at CMC Markets.

Gold climbed to a record above $3,017 an ounce, rising on haven appeal after Israel launched airstrikes across Gaza, shattering a nearly two-month ceasefire with Hamas. Oil advanced for a third day as the escalating tensions in the Middle East overshadowed concerns about a potential global glut.

Investors will also be tracking newsflow from Donald Trump’s call with Vladimir Putin Tuesday as the push continues to end fighting in Ukraine. Details of the US-Russia talks have been sketchy so far, but Trump has said the two sides were talking about “dividing up certain assets.”

The yield on 10-year Treasuries was little changed as the Federal Reserve is set to kick off a two-day policy meeting. The Bloomberg Dollar Index gained 0.1%. The Fed is expected to hold rates steady, with the market focused on officials’ updated economic projections and Chair Jerome Powell’s press conference Wednesday for clues on the path ahead.

In Asia, China’s world-beating stock rally may get a fresh catalyst from a slew of tech earnings, with Xiaomi Corp. and Tencent Holdings Ltd. set to report this week. President Trump said Chinese leader Xi Jinping would visit Washington soon. 

In Japan, trading houses pushed the market higher after Warren Buffett’s Berkshire Hathaway increased its stake. The Bank of Japan is expected to keep the policy rate at 0.5% at a Wednesday decision, according to economists surveyed by Bloomberg. The yen dropped against the dollar for a third day, inching toward the 150 mark again. 

Key events this week:

• US housing starts, import price index, industrial production, Tuesday

• Bank of Japan rate decision, Wednesday

• Federal Reserve rate decision, Wednesday

• China loan prime rates, Thursday

• Bank of England rate decision, Thursday

• US Philadelphia Fed factory index, jobless claims, existing home sales, Thursday

• Eurozone consumer confidence, Friday

• Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.4% as of 8:20 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures fell 0.1%

• Futures on the Dow Jones Industrial Average fell 0.1%

• The MSCI Asia Pacific Index rose 1%

• The MSCI Emerging Markets Index rose 1.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro rose 0.3% to $1.0951

• The Japanese yen fell 0.4% to 149.87 per dollar

• The offshore yuan was little changed at 7.2239 per dollar

• The British pound was little changed at $1.2999

Cryptocurrencies

• Bitcoin fell 1% to $83,080.6

• Ether fell 1.7% to $1,902.8

Bonds

• The yield on 10-year Treasuries advanced two basis points to 4.32%

• Germany’s 10-year yield advanced two basis points to 2.84%

• Britain’s 10-year yield advanced three basis points to 4.67%

Commodities

• Brent crude rose 0.9% to $71.72 a barrel

• Spot gold rose 0.7% to $3,020.37 an ounce