European shares rise as DAX closes at record high

European shares rose on Friday, pushing Germany’s DAX close to a record high, as investors awaited speeches from central bankers later in the day for clues on the future direction of interest rates.

The benchmark index in Frankfurt rose 0.3 percent in early trade, down more than 100 points from a November 2021 high of 16,290, as investors were encouraged by further signs that inflation was cooling.

The country’s producer price index for April showed the annual rate of inflation had dropped to 4.1 percent, compared with 6.7 percent in March. The reading was 0.1 percentage point higher than the forecast from economists polled by Reuters.

Europe’s region-wide Stoxx 600 rose 0.4 percent, while London’s FTSE 100 gained 0.3 percent at the market open.

Traders also took their cues from Wall Street’s gains in the previous session after it was announced that policymakers in Washington could vote to extend the US debt ceiling until next week, averting default before a June 1 deadline. Are.

Investors were also preparing for public speeches by European Central Bank President Christine Lagarde and board member Isabelle Schnabel, which could indicate the path for eurozone interest rates as they appear at separate events later in the day. Were.

The central bank slowed the pace of its rate hike this month, raising its deposit rate by a quarter percentage point to 3.25 percent, saying it had more ground to cover.

Federal Reserve Chairman Jay Powell and Bank of England’s Jonathan Haskell are also scheduled to speak on Friday.

Contracts tracking Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq 100 were flat ahead of the New York open.

The yield on interest rate-sensitive two-year Treasury notes fell 0.05 percentage points to 4.23 percent. The yield on the 10-year benchmark note fell 0.02 per cent to 3.63 per cent. Bond yields rise when prices fall.

The dollar index, which tracks the currency against a basket of six peers, fell 0.2 percent.

Asian shares were down, as pessimism on the tech sector prevented the US rally from spreading to the region.

Hong Kong’s Hang Seng index retreated 1.5 per cent, while China’s benchmark CSI 300 stocks fell 0.3 per cent after weak third-quarter results from tech giant Alibaba weighed on investor sentiment.

China’s onshore currency fell 0.1 percent to 7.027 against the US dollar, its lowest level since December after China’s April data showed weak consumer spending and industrial production, as well as record-high youth unemployment. The numbers point to a faltering economic recovery after ignoring its zero post-Covid restrictions last year.