(Bloomberg) – Shares in Europe rose for the second day along with US index futures as investors await Wednesday’s Federal Reserve policy decision while keeping a close eye on evolving issues of the debt of the China Evergrande group.

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Basic resources and energy were among the top gainers in the Stoxx Europe 600 index as commodity prices stabilized after Beijing moved to contain fears of a spiraling debt crisis at Evergrande which could devastate demand in the real estate sector. Gambling operator Flutter Entertainment Plc has climbed more than 5% after settling a legal dispute.

The S&P 500 and Nasdaq 100 contracts advanced. China avoided a massive sell-off after trade resumed after a holiday, after the country’s central bank increased its gross injection of short-term liquidity into the financial system.

MSCI Inc.’s Asia-Pacific index fell for the third day, dragged down by Japan. T-bills and the US dollar were little changed. The yen weakened and commodity currencies such as the Australian dollar rose. The iron ore stopped its collapse and the metals stabilized. Oil advanced for a second day.

Elsewhere, Bitcoin slipped below $ 40,000 for the first time since early August before rebounding above $ 42,000.

The Fed’s potential timeline for phasing out stimulus measures and any changes in interest rate hike expectations will be critical for investors. The Fed meeting comes after a period of market volatility fueled by the woes of Evergrande. Wider restrictions on China’s real estate sector are also fueling concerns about a slowing economic recovery after the pandemic.

“Over the next few weeks and possibly the next couple of months, Evergrande coupled with the FOMC, the delta variant and a host of other issues will continue to create great volatility and to some extent that volatility will be an opportunity. purchase, ”Vasu said. Menon, executive director of OCBC Bank Wealth Management for investment strategy.

Investors are hungry for clues as to how Beijing plans to cope with the cash crunch in Evergrande, which has liabilities of more than $ 300 billion. The company injected more uncertainty into financial markets with a loosely worded statement about a bond interest payment that left analysts grasping the details.

In Japan, the central bank left its main monetary policy parameters unchanged. The markets in South Korea and Hong Kong were closed for a holiday.

Here are the key events to watch this week:

  • Federal Reserve rate decision on Wednesday

  • Bank of England rate decision on Thursday

  • Fed Chairman Jerome Powell, Fed Governor Michelle Bowman and Vice President Richard Clarida discuss pandemic recovery on Friday

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

  • The Stoxx Europe 600 rose 0.8% at 8:20 a.m. London time

  • S&P 500 futures rose 0.6%

  • Futures on the Nasdaq 100 rose 0.4%

  • Futures contracts on the Dow Jones Industrial Average rose 0.6%

  • MSCI Asia-Pacific index fell 0.6%

  • MSCI Emerging Markets index fell 0.2%

Currencies

  • The Bloomberg Dollar Spot Index changed little

  • The euro was little changed at $ 1.1732

  • The Japanese yen fell 0.3% to 109.51 per dollar

  • The offshore yuan rose 0.2% to 6.4673 per dollar

  • The British pound was unchanged at $ 1.3659

Obligations

  • The yield on 10-year Treasuries rose 1 basis point to 1.33%

  • German 10-year rate rose one basis point to -0.31%

  • The UK 10-year yield was little changed at 0.81%

Merchandise

  • Brent crude rose 1.6% to $ 75.54 a barrel

  • Spot gold rose 0.2% to $ 1,778.72 an ounce

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