European stocks rose on Thursday at the first opportunity to react to the Federal Reserve’s latest decision, with the big story in bond sales that the central bank did nothing to stifle.
The Stoxx Europe 600 SXXP,
increased 0.2%, with even stronger gains for the Stoxx Europe TMI stock. STVP,
US 10-year Treasury yield TMUBMUSD10Y,
it jumped to 1.73%, with the move coming when European traders began their turn. Yields in German TMBMKDE-10Y,
and the United Kingdom TMBMKGB-10Y,
bonds of similar maturity also increased, though not by the same magnitude. Yields move in the opposite direction to prices.
Banks including Deutsche Bank DBK,
widened the growing gap between short- and long-term returns, while rising yields sent the Nasdaq 100 NQ00 futures
lower.
The one-time Federal Reserve plot indicated that the average voter did not plan to raise interest rates in two years. President Jerome Powell said the central bank will keep policy loose until employment recovers as it downplayed what is expected to be a big rise in inflation readings in the new months.
The Bank of England, separately, makes its own decision on interest rates at noon, local time, or at 8 a.m., in the east. Like the Fed, the focus will be on messaging, especially with the UK’s fruitful vaccination efforts. “While there is little doubt about the consensus for‘ no change ’, the market will look for any indication of a change in the MPC’s bias, either through votes or prospects,” said Michael Matthews, fund manager. ‘Invesco.
It is also moving in Europe, Volkswagen VOW3,
preferred shares extended his career to a maximum of six years, an increase of 5%. Porsche Automobile Holding PAH3,
which is the majority owner of Volkswagen, also gained 5%. Expectations about VW’s electric vehicle ambitions have been fueled by the company’s battery presentation earlier in the week.
Sartorius SRT,
the supplier of pharmaceutical and laboratory equipment, jumped 10% after tour sales and margin guide for the year, citing the strong first ten weeks of 2021.