Five Things You Need to Know to Start Your Day: Europe
Get up to speed with what the markets are monitoring
Good morning. Asian shares rally with help from the BOJ. The Middle East awaits an Iran response. And Switzerland mulls an inheritance tax. Here’s what people are talking about.
Asian shares rallied after the Bank of Japan’s deputy governor said it won’t raise interest rates if markets are unstable, comforting investors unnerved by a recent surge in the yen. The comments offered much-needed reassurance at a time when many remain concerned that the unwinding of the yen carry trade has further to run. Meanwhile, behind the scenes of Monday’s trillion-dollar selloff, big-money players were doing something usually reserved for the retail crowd: buying the dip. While newbie investors bailed, hedge funds that make both bullish and bearish equity wagers snapped up individual US stocks at the fastest pace since March. But while equities look set for a rebound, US Treasuries are at risk of a further selloff as traders cash in on bets for aggressive Federal Reserve interest-rate cuts this year. After piling into Treasury futures contracts at a rate not seen since 1982, according to CME Group Inc. data, traders are starting to pull back on dovish bets. Goldman Sachs Group Inc. Chief Executive Officer David Solomon predicted the Federal Reserve will avoid taking emergency steps as he sees the US economy skirting a recession.
Read Garfield’s assessment of European equities below.