* STOXX 600 up 0.3%
* Wall Street futures rise
* Euro zone factory activity jumps
* Atos falls on accounting issues
April 1 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
CHINA'S LIQUIDITY TIGHTENING WORRIES (1040 GMT)
One of the big dilemmas for China's equities continues to be whether a liquidity tightening is on sight or not.
More concerns about it came up when the government announced it intends to keep the macro leverage ratio stable in 2021 in a move which might reduce the broad money supply growth.
BofA says risks of tightening have risen but are not “overly concerning.” Let's see why.
The rise in the overall leverage ratio in 2020 was mainly due to the slump in GDP growth, while the increase in debt growth was small.
In 2021, with a nominal GDP growth to above 10%, China “will likely be able to deliver stable leverage ratio without too much pain.” BofA estimates that credit growth, measured by total social financing (TSF) growth, will only decelerate by 2ppt.
Besides, China will likely step up its policy measures to curb local-government-related shadow financing and property-related leverage accumulation, while high-end manufacturing, green economy and small private enterprises will likely remain supported.
(Stefano Rebaudo)
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OPENING SNAPSHOT: NEW QUARTER IN THE BLACK (0742 GMT)
European shares enter the new quarter in positive territory as optimism around a $2 trillion U.S. government spending plan outweighs concerns about France new lockdown. pan-European index .STOXX is up 0.5% with tech and travel sectors leading the gains. blue chip index CAC .FCHI is trading up 0.3% even after Macron ordered the country into its third national lockdown amid a third wave of COVID-19 infections. of the Easter weekend, Denmark and Norway bourses are closed today, while Sweden will be trading for half day. Spain stock exchange is open but it is a public holiday.
Here is your opening snapshot a few minutes ago:
(Joice Alves)
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HOPEFULLY NOT THE CRUELEST MONTH (0721 GMT)
April is said to be the cruelest month so investors in global equities, emerging from the worst quarter in a year, will be hoping the adage doesn't hold true for them. Indeed, last April, world stocks gained over 10% after March mayhem.
In any case, they are starting off on a firmer footing, bolstered by a strong close on Wall Street (U.S. stocks actually enjoyed a robust Q1 too), President Joe Biden's $2 trillion infrastructure spending proposal and upbeat factory surveys from Asia on Thursday. European shares are higher.
Signs are the U.S. and Chinese recovery will bolster the world economy -- Wednesday data showed U.S. private employers boosted hiring in March as more Americans were vaccinated against COVID-19. Data due on Friday (when many markets are closed) are expected to show 647,000 jobs added in March, adding to February's 379,000 rise.
So will Treasury yields spoil the party? Ten-year yields US10YT=RR rose 80 basis points in Q1,their largest quarterly rise since end-2016. The Fed has pledged to keep rates near zero for some time; markets price a 25 basis-point rate hike in December 2022.
Things are going less well in Europe with France entering another month-long lockdown. The euro is near five-month lows, German yields rose 30 bps in Q1 but have since eased.
The much-needed EU recovery fund has meanwhile hit roadblocks, with a German constitutional court looking into new legal challenges against the plan.
Elsewhere, oil prices are up almost $1 on expectations the OPEC+ producers group would keep production curbs in place.
And for all the companies hit by chip shortages, there was good news as Taiwan's TSMC announced plans for a $100 billion investment to increase capacity. It comes days after Intel Corp (NASDAQ:INTC) announced a $20 billion expansion plan.
Key developments that should provide more direction to markets on Thursday:
- UK retailer Next reported a halving in annual pretax profit but forecast a bounceback French food services group Sodexo beat first-half profit margin and expects second-half revenue to expand German retail sales up 1.2% m/m in February Final PMIs everywhere due out.
- Federal Reserve Bank of Philadelphia President Patrick Harker speaks 1700; Dallas Fed President Robert Kaplan 2205
- Weekly U.S. jobless claims, ISM manufacturing data due out
- On FRIDAY, U.S. non-farm payrolls is due out.
(Sujata Rao)
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MORNING CALL: U.S. SPENDING PLAN, FRANCE lockdown (0540 GMT)
After the STOXX 600 index .STOXX ended the first quarter of 2021 with a 7.8% rise, European shares are seen on the black as the first session of the new quarter kicks off.
U.S. President Joe Biden on Wednesday outlined a plan to restart the economy, including spending on roads, railways, broadband, clean energy and semiconductor manufacture. capping the optimism, Macron ordered France into its third national lockdown as he sought to push back a third wave of COVID-19 infections. will also be on EZ manufacturing PMI numbers, which are expected to be holding up well.
"Manufacturing PMI has been one of the main bright spots amidst the gloom of the economic rebound in Europe, as businesses adapt to the restrictions around them, and show resilience in the face of a changed environment," writes Michael Hewson, Chief Market Analyst at CMC Markets UK.
Financial spreadbetters at IG expect London's FTSE to open 11 points higher at 6,725, Frankfurt's DAX to open 16 points higher at 15,024 and Paris' CAC to open 2 points lower at 6,065.
(Joice Alves)
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