and Chinese authorities’ decision to pump more cash into financial markets to potentially offset the fallout from embattled real estate firm China Evergrande Group.Gains were led by the energy sector, which rose almost 2 per cent while Wall Street too was tipped for a firmer session, with S&P 500 futures up 0.3 per cent.
“This would have been the option that would probably have brought about the largest shift in policies in Germany and in the German stance towards European politics - specifically as regards fiscal expansion. This option is now safely off the table.” Nor is the issue confined to Europe, with a Chinese power crunch triggering a contraction in industry and pressuring the economic outlook.
Investors are therefore repositioning portfolios; US 10-year Treasury bond yields, a key determinant of global capital costs, jumped 9 basis points last week while industrials-heavy US Dow Jones index outperformed the Nasdaq index of tech stocks.The rise in US yields, especially on an inflation-adjusted basis, is also lifting the dollar which rose 0.15 per cent against a basket of currencies inching towards the one-month high hit last week.