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European Shares Set To Rise As US Debt Fears Recede

marketopen 011519 07oct21 lt

European stocks are seen opening higher on Thursday as investors cheer signs of progress on resolving the standoff in U.S. Congress over the debt ceiling.

Meanwhile, amid a global energy crunch, Russia's President Putin said Gazprom will send more gas to Europe via Ukraine.

Asian markets advanced on news of possible temporary extension of debt limit in the United States to avert a government default by mid-month.

Democrats look likely to accept the GOP's latest offer to lift the debt limit for less than two months, but the final details are still being ironed out.

Investor sentiment was also underpinned amid reports that the United States and China have agreed in principle for their presidents to hold a virtual meeting before the end of the year.

U.S. Secretary of State Antony Blinken said that the U.S. Is looking to China "to act responsibly and to deal effectively with any challenges."

Treasury yields retreated and the dollar index was little changed as investors await the weekly jobless claims report later today and the release of the monthly jobs report on Friday for clues to the Federal Reserve's exact timeline to begin asset tapering.

In other central bank news, the Bloomberg reported that the European Central Bank is studying a new bond-buying program to prevent any market turmoil when the pandemic emergency program ends.

Destatis is scheduled to issue German industrial production data for August later in the day. Economists expect output to decline 0.4 percent month on month, reversing a 1 percent rise in July.

Gold inched lower as the dollar held close to a one-year high on inflation concerns.

Oil extended losses for a second straight session after data showed larger-than-expected rise in U.S. oil stockpiles and U.S. Energy Secretary indicated that the country is ready to release its strategic petroleum reserve to calm oil and motor prices.

U.S. stocks reversed early losses to end higher overnight as ADP employment data beat analyst expectations and Senate Minority Leader Mitch McConnell, R-Ken., offered to allow a temporary extension of the debt limit.

The Dow plunged by more than 450 points before ending the session 0.3 percent higher. The tech-heavy Nasdaq Composite rose half a percent and the S&P 500 added 0.4 percent.

European stocks fell sharply on Wednesday amid concerns over inflation and higher interest rates.

The pan European Stoxx 600 gave up 1 percent. The German DAX lost 1.5 percent, France's CAC 40 index shed 1.3 percent and the U.K.'s FTSE 100 declined 1.2 percent.

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