European stocks advanced while US index futures drifted after more signs emerged that China will move to lessen the trade war’s repercussions. European sovereign bonds nudged lower and Treasuries steadied.
The Stoxx Europe 600 Index climbed, driven in part by the strong rotation into cyclical sectors that had lagged behind this year, such as mining and banking shares. Contracts on the three main US equity indexes all fluctuated. Yields on 10-year Treasuries and similar German bunds both touched one-month highs on Wednesday.
Equities jumped in Japan and Hong Kong after an influential newspaper editor said China will implement measures to ease the trade war’s impact on the world’s second-biggest economy. The measures planned by Beijing will benefit some companies from China and the US, Global Times editor Hu Xijin said in a Twitter post. Japan’s currency dropped for a third straight session.
Stocks are rebounding in September on hopes for fresh monetary stimulus from the European Central Bank on Thursday and the Federal Reserve next week, while market-supportive measures by China helped lift sentiment. Strong monetary easing is not a given, though, with some investors dialling back their expectations of accommodation and bond traders pulling back from the more bullish sentiment of August.
Elsewhere, oil futures climbed alongside gold. South Korean infrastructure shares outperformed after the departure of President Donald Trump’s national security adviser, spurring speculation the US may show conciliatory gestures toward China and North Korea.