European stocks are opening higher today, keeping the more optimistic mood as the momentum from Wall Street and Asia carries over into the session. Here are the opening changes:
- Eurostoxx +0.5%
- Germany DAX +0.5%
- France CAC 40 +0.2%
- UK FTSE +0.6%
- Spain IBEX +0.7%
- Italy FTSE MIB +0.7%
The gains are fairly broad-based but France is once again the notable laggard. The CAC 40 is still trading higher, though the smaller gains reflect the fact that investors are not quite ready to look past the country’s fiscal troubles just yet.
French government bonds have come under heavy pressure in recent sessions as markets question whether the government can deliver on its budget plans and stabilise the debt outlook. That saw the yields spread between French 10-year bonds and German 10-year bonds surge to 150 bps on Friday last week, the widest since 2012.
So, that remains one of the bigger risks hanging over European assets for now.
Elsewhere, US futures are also pointing modestly higher with both S&P 500 and Nasdaq futures up around 0.2%. That continues the tech-led advance from Wall Street overnight after the Nasdaq closed at another record high.
Still, I wouldn’t read too much into the early gains just yet.
Long-end Treasury yields remain close to multi-decade highs, keeping the broader rates pressure firmly in view. And in Europe particularly, the key question remains whether the fiscal stress in France stays contained or begins spilling over more noticeably into the rest of the region.
This article was written by Justin Low at investinglive.com.