Stocks Gain as China Virus Easing Spurs Optimism: Markets Wrap

(Bloomberg) — Stocks and US futures advanced after China eased some virus curbs and Wall Street had its best week since November 2020. Euro-area bonds tumbled after inflation prints surprised to the upside.

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A fourth day of gains for European equities extended their longest winning streak since late March and drove the Stoxx 600 index to the highest in more than three weeks. Luxury stocks outperformed Monday as China’s reopening plans boosted sentiment.

Nasdaq 100 contracts climbed more than 1% and S&P 500 futures also rose in a sign the bounce in US stocks may have further to run. The S&P 500 wiped out its May losses and snapped a string of seven weekly declines as institutional investors rebalanced portfolios into the end of the month.

The dollar slipped for a third day versus major peers as havens lost their appeal amid the improved mood. Cash Treasuries weren’t trading because of the US Memorial Day holiday.

Oil climbed in response to the easing of Chinese lockdowns and as the European Union worked on a plan to ban imports of Russian crude.

Spanish inflation unexpectedly quickened, denting hopes that the euro zone’s record price surge has peaked and piling more pressure on the European Central Bank to act. Inflation in the German state of North Rhine-Westphalia rose to the highest level since at least 1996 and could indicate a higher-than-forecast national figure.

In Asia, Japanese and Hong Kong equities led gains. China’s yuan outperformed after the nation reported fewer Covid-19 cases in Beijing and Shanghai. China’s reopening moves prompted a gauge of emerging-market stocks to rise to the highest since May 5. Bitcoin posted its biggest gain in two weeks, climbing close to $31,000.

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