Futures Rise, Global Stocks Set For Best Week In Six Unfazed By Terrorism Concerns

Futures are modestly higher in early trading having tracked the USDJPY once again almost tick for tick, with the carry trade of choice rising to 123 shortly after Mario Draghi’s latest speech pushed the dollar strong initially only to see most gains promptly evaporate against both the Yen and the Euro. European shares are likewise little changed, after gaining earlier, while Asian stocks rise; oil also advanced in early trading only to drop to its lowest overnight level moments ago, a few dimes over $40, with aluminum and copper both posting modest increases.

Perhaps it is worth noting that a week which many predicted would be bad for risk assets has been precisely the opposite and nowhere more so than in France, where as Bloomberg reports, after Europe’s worst terror attack in more than a decade hasn’t deterred equity investors this week, with France’s CAC 40 Index rising as much as 2.5 percent. Fewer than 10 stocks have fallen, among them Accor, Europe’s biggest hotel operator, which dropped 4.7 percent on Monday on concern about tourist flows. Since then it’s clawed back more than half of those losses. The CAC 40 Index remains one of Western Europe’s best performing equity indexes this year. Only Denmark, Ireland, Italy and Austria have fared better

As Bloomberg reports, while global stocks are little changed so today, the MSCI All Country World Index is on track for its best week in six. Investors have a new-found belief the path of U.S. interest rate increases will be gradual even if the Federal Reserve embarks on tighter monetary policy next month for the first time in nine years. The MSCI Asia Pacific Index has risen 1.6 percent this week, while the MSCI Emerging Markets Index has jumped 2.4 percent.

Perhaps more notable is that despite the Fed’s tightening rhetoric, emerging market currencies are set for their first weekly gain in five. The JPMorgan Emerging Market Currency Index has risen 0.5 percent over the past five days, the most since Oct. 9. This week some of the year’s worst-performing emerging market currencies have rallied against the dollar. The Brazilian real has risen 3.5 percent, having dropped 28 percent in 2015. The South African rand has jumped 3 percent after falling 17 percent this year.

This is where we stand currently:

Among the top overnight news: Obama, Putin Agree on One Thing: Bombing Islamic State’s Oil: French leader to push for consensus in Washington, Moscow; France Scrutinizes EU’s Terror Failings a Week After Attacks: Hollande presses ahead on military cooperation with Russia; Swedish Prosecutor Detains Suspected Terrorist: suspect affiliated with Islamic State in Iraq, Swedish media says; Pfizer Said Near Allergan Deal as U.S. Targets Inversions: U.S. drugmaker may pay as much as $380 per share for Allergan; Draghi Says ECB Will Do What It Must to Raise Inflation Quickly: ECB President spoke in speech in Frankfurt; ABN Amro IPO Raises $3.6b as Government Cuts Stake: IPO values ABN at EU16.7b as bank returns to market; 1MDB Said to Near $2.3b Power Sale to Chinese-Led Group: deal with group may be announced as soon as this weekend; Gap Cuts Annual Profit Forecast as Sales Continue to Slide: Sees FY2016 adj. EPS $2.38-$2.42 vs prior view $2.75-$2.80; Goldman Said to Raise $1.3 Billion to Buy Stakes in Hedge Funds: bank started raising money for Petershill II in 2013, initially aiming to raise $1b, according to person familiar.

A closer look at the markets shows Asian stocks rose, with the regional benchmark index extending its biggest weekly advance in 6 weeks; equities traded mixed in a tepid fashion following the flat lead from US bourses. ASX 200 (+0.1%) extended on gains led higher by financials, subsequently on course for the 2nd best week of 2015, while the Nikkei 225 (+0.1%) initially fell as Japanese exporters continued to feel the squeeze from a stronger JPY before recovering heading into the close. Shanghai Comp. (+0.1 %) traded with mild gains following reports that the PBoC reduced the SLF rates in an attempt to combat deflationary pressures., JGBs fell following a lacklustre enhanced liquidity auction which drew a lower than prior b/c.