European stocks were recovering from a big drop on Tuesday. The uptick in European shares happened as the selloff in long-term bonds seemed to calm down.
The main European stock index, the STOXX 600, rose by 0.4%, with the technology sector leading the way with a 1.3% gain.
Shares of Adidas climbed 2.5% after the company Jefferies upgraded its recommendation for the German sportswear brand to “buy” from “hold.” Jefferies noted that Adidas has more different ways to grow its business. The pressure on stocks eased as long-term European bonds became more stable.
This was a relief, as the main STOXX index had seen its biggest one-day drop in over a month on Tuesday due to worries about government finances. However, concerns are not completely gone, as the yields on long-term German and French bonds are still at multi-year highs.
The FTSE 100 and DAX index were both flat in early trade and hovering near key levels of support.
On the FX front, the British Pound and Japanese Yen remain under pressure due to concerns about Government finances and political uncertainty in Japan.
The US dollar benefitted as the British pound and the Japanese yen both lost value. The dollar’s overall strength, measured against a basket of other world currencies (DXY), had already gone up by 0.66% on Tuesday.
Following this trend, the euro also dropped a small amount, adding to its losses from the previous day.
Meanwhile, the Australian dollar’s value stayed mostly the same, and the New Zealand dollar also saw a slight decrease trading at 0.5861 to the USD.
Currency Power Balance